What are the positive and negative aspects of mandated minimum wages?

Answer 1

There are many economist that favor a minimum wage including some with Nobel prizes.

positive
not only minimum wage workers will see pay increases but firms that have low pay employees they want to keep need to pay more than the minimum because there are lots of minimum wage jobs for good employees to choose from. This will reduce the growing income inequality in the US. The latest report from the IRS indicates that the bottom 50% of households recieve less than 12% of the income.

negative
The additional wage costs will cause some inflation, but it will be only a small amount. You could increases the pay of everyone in the bottom half, 10% for less than 1.2% of gdp. and the total effect of the wage increases will be much less than that.

There will be some increase in unemployment, but emperical studies show that it is small to undetectable, and concentrated in the teenage workforce. The net income gains to low wage workers is much greater than the net loss due to additional unemployment.

Answer 2

Positive: nothing

Negative: Firms are forced to pay higher wages than some employees worth, plain and simple. Therefore, why would these firms raise their costs when they don't have to? At the most simplistic level, the "fairest" wage a laborer earns is their marginal product, or the additional revenue they bring to the firm. Also, minimum wages, like other price floors, cause surpluses, in this case of labor, also known as unemployment. So sure, mandate a wage above that of the market level, and watch the number of unemployed rise.

Is a person better off making $4/hr or $0/hr? Think about it: bureaucrats and ignorant, poorly educated people alike try to dictate wages and prices every single day in our economy. But artificially constructed wages and prices aren't impervious to the laws of economics, despite the grandiose appeals of the know-it-all types that are prevalent today. The artificially constructed prices and wages have consequences, which are manifested in the continuation of the very problem(s) that were set out to be eradicated by the "good nature" of welfare, minimum wages, and other subsidies.

Get off your cross; If you really want to help, think. Forget this illusion that merely throwing money at a problem will fix it entirely. In other words, actually study economics instead of pretending you do.

Answer 3

Positive:
- People will be paid fairly and companies won't be able to take advantage of them

Negative:
- Companies may raise prices in order to make up for it?