Price controls are maximum and minimum prices established by the government for goods and services. Minimum wage is a price control on the minimum amount a worker can be paid. Minimum wage was a struggle to get past in the Supreme Court. The first effort to get minimum wage was in 1912, but didn’t get passed until 1938 during the Great Depression, but only applied to "employees engaged in interstate commerce or in the production of goods for interstate commerce". Minimum wage was then extended in 1961 and 1966, applying to a larger workforce to what we see now today. Although there is large debate on whether or not we should have a minimum wage, studies show that minimum wage is more harmful then it actually seems.
Minimum wage, like any other idea, has positives and negatives. The theory behind minimum wage is to reduce those under the poverty line, and to ensure workers are getting paid a fair amount for their work and skill set. A set minimum wage is thought to boost income for those lower paid workers in order to reduce poverty, and ensure no one is taken advantage of. Higher pay also is thought to increase the incentive of people to find jobs and reduce those on government aid. But given these points to ensure fairness to …show more content…
Looking at a basic economic supply and demand graph with labor supply and labor demand lines indicate an excess supply, which means unemployment. Comparing the graph results to real time is surprisingly accurate. Research has been done in many different places and different years, and each studied concluded minimum wage creates more unemployment. For example, a 2012 study by Professor Joseph Sabia at University of New Hampshire concluded that a wage increase in 2004-2006 resulted in a 21.8% reduction in employment, especially for those less skilled and less educated. Therefore, an increase in minimum wage creates more unemployment and
Minimum wage, like any other idea, has positives and negatives. The theory behind minimum wage is to reduce those under the poverty line, and to ensure workers are getting paid a fair amount for their work and skill set. A set minimum wage is thought to boost income for those lower paid workers in order to reduce poverty, and ensure no one is taken advantage of. Higher pay also is thought to increase the incentive of people to find jobs and reduce those on government aid. But given these points to ensure fairness to …show more content…
Looking at a basic economic supply and demand graph with labor supply and labor demand lines indicate an excess supply, which means unemployment. Comparing the graph results to real time is surprisingly accurate. Research has been done in many different places and different years, and each studied concluded minimum wage creates more unemployment. For example, a 2012 study by Professor Joseph Sabia at University of New Hampshire concluded that a wage increase in 2004-2006 resulted in a 21.8% reduction in employment, especially for those less skilled and less educated. Therefore, an increase in minimum wage creates more unemployment and