Wages is the payment given to workers for accomplishment in labour. Equilibrium price described as the price at which the quantity of a product offered equals to quantity of the product demanded. A floor price is a legal price set by the government, it is the binding when set above the equilibrium price. At the price, quantity supplied will exceed quantity demanded, leading to a surplus (Wright, T. C., 2016). The fair work commission sets the minimum wage annually (Fair Work Ombudsman, 2015).
Countless economists such as Peter Diamond believe that raising minimum wage for unskilled labour would create greater unemployment. The following graph illustrates how a binding floor price leads towards a surplus supply; in this case unemployment …show more content…
(Belman, Dale). This shows how over the past few year’s minimum wages issues has been challenging, it is argued if it should be increased, decreased or eliminated all over. Thomas K explains how minimum wages does not measure up, therefore no group will be helped in increase of minimum wages except high skilled workers while low skilled workers will be hurt by increase as it will cost them to loose their jobs as employers do not want to train new workers, therefore it is best if minimum wages is eliminated as does not benefit anyone (Dilworth Thomas K, 1994).
Effect of minimum wages on employment has been the most definite topics researched on. Having some evidence suggest that minimum wages could increase low- wage employments. Looking from a policy perspective acknowledging higher minimum wages could ideally raise employment in a labour market. (Neuamark, David 2008). If minimum wages are increased consequences include reduce in low skilled workers therefore losing jobs, negative effects on skills. Furthermore raising the minimum wage would hurt the most vulnerable workers but will eventually mean higher price for consumers. (J. Vokal, …show more content…
Increasing it will effect low-skilled workers which can lead to no jobs for that particular group as it makes it harder for youth and poor to get a job as employer do not have enough time to train new workers. While decreasing it means high-skill workers will be affected as they would not work for low money and will affect businesses and consumers. Overall it is preferred to eliminate minimum wages, as minimum wages does not benefit the society each group is hurt by either increase or
Countless economists such as Peter Diamond believe that raising minimum wage for unskilled labour would create greater unemployment. The following graph illustrates how a binding floor price leads towards a surplus supply; in this case unemployment …show more content…
(Belman, Dale). This shows how over the past few year’s minimum wages issues has been challenging, it is argued if it should be increased, decreased or eliminated all over. Thomas K explains how minimum wages does not measure up, therefore no group will be helped in increase of minimum wages except high skilled workers while low skilled workers will be hurt by increase as it will cost them to loose their jobs as employers do not want to train new workers, therefore it is best if minimum wages is eliminated as does not benefit anyone (Dilworth Thomas K, 1994).
Effect of minimum wages on employment has been the most definite topics researched on. Having some evidence suggest that minimum wages could increase low- wage employments. Looking from a policy perspective acknowledging higher minimum wages could ideally raise employment in a labour market. (Neuamark, David 2008). If minimum wages are increased consequences include reduce in low skilled workers therefore losing jobs, negative effects on skills. Furthermore raising the minimum wage would hurt the most vulnerable workers but will eventually mean higher price for consumers. (J. Vokal, …show more content…
Increasing it will effect low-skilled workers which can lead to no jobs for that particular group as it makes it harder for youth and poor to get a job as employer do not have enough time to train new workers. While decreasing it means high-skill workers will be affected as they would not work for low money and will affect businesses and consumers. Overall it is preferred to eliminate minimum wages, as minimum wages does not benefit the society each group is hurt by either increase or