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in the amount of minimum wage brings about reduction in the employment levels evidently seen with employment elasticity ranging from -0.1 to -0.2 amongst the teenagers and from -0.15 to -0.2 for the youths (Charles, 2002, p 89).
Employers in a firm are bounded with the minimum wage law which is meant to prevent the employers from paying their employees rate below the minimum wage. This law is widely used in the present day countries. In UK and the USA, this law was only applicable to the women and the children. The extended use of the law was influenced by the period of the great depression. If the objective of the minimum wage was to ensure that employed achieved a worthy standard of living, then some provisions had to be made for those who are retrenched (Flinn, 2010, p58-62).
During the imposition of the minimum wage by the responsible bodies, firms within that jurisdiction would not be permitted to pay less than what the responsible body mandates, for any service that they have received. For instance, this is when the governing body passes legislation that is meant to raise the wage bill from its initial of $6.72 per hour to $8.0 per hour. In line with the above minimum wages, at $8.0, supply of the labour service was 70,000 hours, but only 50,000 hours was what was in demand by the firms. Within a market with voluntary trade, the decisions of firms to hire its employees cannot be influenced with an external body, reason being the quantity of labour needed is normally established through the desire of the firm to buy but not the desire of the workers to sell (Joshua, 1999, p 123).
Through the above discussion there is an assumption that, increasing the amount of minimum wage in a country, the number of employed individual would increase. In addition, there is an emerging possibility that everyone would be able to get a job. However, the number of hours that they initially worked would be reduced. Putting this case into consideration, there would be rise in
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6 Conclusion 8 Reference 9 Introduction The different types of labor markets are skilled, semi skilled and unskilled markets. The workers skilled in a certain job are categorized in the skilled market while the unskilled workers fall under unskilled market.
In fact, as a consequence of the myriad controversies that surround the issue of minimum wages, many a state has established laws that set legal minimum wages for different groups of workers (Neumark & Adams 5). For example, in the U.S., the Fair Labor Act deals with minimum wage.
Although minimum wage laws have affected different jurisdictions, there have been different opinions concerning the benefits and disadvantages of minimum wage. Those that support the idea of minimum wage claims that it increases the standard of living of employees, reduces inequality, reduces poverty, makes businesses to be more efficient and increases the morale of the workers (E, Michael, Canada, & Policy, 2008).
Despite escalation in productivity and inflation since 1968 there has not been a proportionate enhancement in minimum wage James Cicarelli, Since1968, 2003). The "living wage movement" owes it's genesis to the failed attempts by the legislative to effect greater parity between minimum wage and living wage.
Business owners pick up the tab thus reducing their profits. The theory suggests that if this same money were retained by wealthier individuals, the business owners, it would more likely sit in a bank or be locked-up in an investment of some sort. On
Adjustment of the SeaTac’s minimum wage is among the hot debates that have hit the city’s economic scenes since it directly affects a number of economic aspects across the State. A hike in minimum wage influences factors such the opportunity cost, general demand and supply, producer and consumer surplus, general company profits and aggregate supply and demand
Some of the adjustments that companies make include reducing hiring, reducing the employees working hours, reducing the benefits accrued to workers such as a free lunch, and charging higher prices on some of the commodities. Setting
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