Please explain your answer. Please state source, if applicable. OR should the government reinforce the minimum wage law?
2007-02-23 21:41:40 · 4 answers · asked by asphyxia 3 in Education & Reference ➔ Homework Help
This is "Economics 101" in a nutshell::
Minimum wage is a mistake.
It creates a false-high pay for the work of unskilled labor.
If an employer has to pay more for labor, he has to charge more for his products. This increased charge is invariably larger than the percentage of increased labor cost due to taxes.
The increased product cost means Higer sale price of the product.
Higher price means that fewer products will sell.
Fewer sales means less products need to be made.
Less products being made means fewer employees are needed.
The guy to lose his job will be... the guy who is making minimum wage.
But because THAT guy lost his job, he can't buy stuff. That means OTHER companies lose business, and have to lay off workers.
The end result is inflation and increased unemployment.
2007-02-23 21:48:59 · answer #1 · answered by Anonymous · 0⤊ 0⤋
The above poster is 100% right but another factor comes in play; the countries economy, and cost of living.
For instance in canada the economy is booming, house prices are rising because of the economy, people are moving in and buying products and produce price is a factor yes, but with such high demand and increase on cost of living, and since Canada's a first world country minimum wage should be increased.
But in the Phillippines minimum wage shouldn't be abolished because its a 3rd world country and there is no industrial standards in place and therefore market heads will charge whatever wages they feel like, and the economy wont be going anywhere, (who can afford to buy something when they cant afford it), therefore minimum wage should be kept at the countries individual standards by looking at the economy and cost of living.
2007-02-23 21:58:03 · answer #2 · answered by Ken W 1 · 0⤊ 0⤋
The Philippines cannot yet afford to abolish minimum wage law for the reason that it is manner of proportional distribution of wealth. Source is Labor laws that provides minimum wage, overtime pay, incentives, probation wage, etc. Also wage regulatory board. Hence, government must reinforce it until such time employers are able to share their gains.
2007-02-23 22:36:00 · answer #3 · answered by wilma m 6 · 0⤊ 0⤋
Minimum wage is a dollar a day in the Phillipines. Its as close to being abolished as you can get. There is no point since that country is so corrupt that anychange in the law would do anything.
2007-02-23 21:52:04 · answer #4 · answered by Anonymous · 0⤊ 0⤋