The Minimum Wage Dilemma

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The Dilemma of Minimum Wage and How it Effects the Labor Market Minimum Wage Minimum wage is a price floor set by the government that mandates companies and employers to pay their employees and workers a certain amount. Minimum wage is the lowest hourly, daily or monthly wage that an employer can legally pay their employees. It is the lowest rate at which an employee can sell their labor for. Minimum wage was created in New Zealand in 1894 as a means to control proliferation of sweatshops in manufacturing where women and children became subject to increasingly low paying, and unfair working environments. As a result, today there are minimum wage laws in the legislation of over 90% of all countries. Although, despite this high adoption rate, there is still much debate on whether the minimum wage law is effective in bringing the poor out of poverty, which was it’s original purpose. The premise behind minimum wage legislation issued by government is that by doing so, they are able to increase the earning power of all marginal workers. Embedded in this notion is the assumption that a business’ main goal is to generate the most profit possible, so no business owner will never voluntarily increase the pay of their workers. In order to counter this, government issues a minimum amount in which a business is allowed to pay their employees. The concept of minimum wage not only goes against everything it means to be a “free society”, but it is also completely illogical according to a vast majority of economists. If the government can control the real wages of millions of Americans by simply passing legislation that says so, then why stop at $9.04 per hour? Why not make it $15 per hour? Isn’t $100 per hour more compassionate to the average entry level, unskilled employee than $9.04 per hour? To most (I would agree), this logic may sound crazy, but it is
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