Minimum Wage Essay

1208 Words Sep 4th, 2013 5 Pages
Shukla; Ashish; 1381406 Minimum wage
The 2012 minimum wage bill in parliament is defeated, and created dissatisfaction in society, as people are really struggling to manage their lives, especially particular section of society who is unskilled and working on minimum wage. Now to understand the issues we have to look into two perceptions first from general public for whom good life means more money, second from economist mind for example Tim Maloney who studied series of data from 1985 to mid 1990 to addresses the impact of minimum wage change on teenagers and young adults. He finds negative impact of minimum wage on youth and young adults labor market, with demand elasticity of -0.35, and
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Study carried out in (2000-2003) based on two groups of teenagers, no of hours worked and compared them to adult, aged between 20-25, shows that the size of increase in minimum wage had no effect of unemployment. This research shows the employment elasticity of 2.3-2.5 respect to minimum wage change of 0.25 percent (Hyslop & Stillman, 2004). The other factor is that, the increase in minimum wage can affect the adult labor market in certain business like hospitality or fast food chain, as employer will prefer younger labor compare to adult, who have more experience in order to save cost.
Women plays an imperative role in society, also considered most vulnerable to change in minimum wage, especially with no school or post school qualifications. Studied carried out by Gail A Pacheco and Tim Maloney in 2000, on affect of minimum wage increase on women based on time series regression analysis proves that very little evidence of adverse effect of increase in unemployment of female with no school or post school qualification. The only exception was a 10 percent increase in minimum wage, reduce 4 percent employment in unqualified female and 7 percent in overall labor market by removing linear time trend from previous estimations (Pacheco & Maloney 1999). In comparison to male female face relatively low wage rates, their employment opportunities are directly affected by increase in minimum

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