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Advantages and disadvantages of minimum wage.
Member rating: No Rating | Words: | Submitted: Wed Oct 15 2003
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Advantages and Disadvantages of Minimum Wage Wage, one of the rewards of the factors of production, is the price of labor for its contribution to production. In a free market system, wage is determined through the interaction of market forces of demand and supply. In earlier times, the Iron Law of Wages, doctored by David Ricardo in 1817, was held by many classical economists who felt that wages were flexible upwards and downwards, depending upon shifts in demand and supply. It was discovered later on that wages determined by market forces were much below what the workers deserved for their mental and physical work. The workers were receiving what was termed 'salvation wages'. To protect workers from exploitation by employers, government legislation was needed. Therefore, minimum wages were imposed. A minimum wage is an artificial wage imposed on the market by the government in order to ensure that workers were paid...
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