Veto in Minimum Wage Rouses Many in Albany - Essay Example

In the real world situation, changes in the economic policies should always be approved by government officials. As politicians have different viewpoints, it is often hard to pass bills and laws which will bring about drastic changes. Analysis The issue of minimum wage is always debated in all economies globally and not just in the United States. As the writer puts in the article, there are two sides of the coin which should be taken into consideration before the minimum wage could be raised.

Through our class discussions, I have learned that minimum wage should be a matter of supply and demand. It is the least acceptable payment that an employee can accept while it is the highest which can be charged for a firm. For an employee, the minimum wage should be able to cover up the estimated productivity of the worker as well as the opportunity cost of his time. On the other hand, a company should make sure that the employee's output is worth his hourly payment. An employer is not willing to pay more than the value that he can provide to the company.

Thus, the class discussion also emphasizes that the increase in the minimum wage should always be coupled with the increase in the productivity of the worker. If not, it will just be an additional burden to the employee. Furthermore, the rise in minimum wage will change the cost structure of the firm. In order to adjust, the firm should take measures to increase efficiency in order to cope with the additional cost. It can only continue operating if it is still producing output that is higher or equal to the intersection of average fixed cost and marginal revenue.

Conclusion Through this activity, I am very much impressed by how an understanding of economic issues is enriched through knowledge in economics. Economic policies always have social and ethical considerations; however, knowledge of sufficient economic techniques will enable us to decide more efficiently.