Minimum Wage
Cities like Emeryville are raising the minimum wage to keep up with the cost of living. Other cities and states are looking and debating on whether they should raise the minimum wage. People want to raise wages to fight poverty. Some companies can raise the minimum wage and still make profits by raising the prices on their goods. Other companies decided to send their companies overseas and pay their new employees lower wages. One change in the economy can lead to other changes.
I.Price floor
A price floor is a government imposed price control or limit on how low a price can be charged for a product. Price floors are usually set above the equilibrium. The black market is an illegal market that sells illegal goods or services. …show more content…
Some examples are the cost of capital, wage rates, and the selling price of its output. Producers demand more jobs when wage rates are low. Producers demand fewer workers when wage rates are higher. Workers supply more labor at higher wages and supply less labor at lower wages. More workers enter the market when wages are high. Target is demanding fewer workers because it does not want to pay higher wages. “New Jersey restaurants increased, rather than fell, in response to a minimum wage rise”(Maximin). This article explains how workers are more willing to work at higher …show more content…
The minimum wage can cause a surplus of people wanting to work which creates a deadweight loss. Workers are more willing to supply labor at a higher minimum wage. Producers demand less labor at higher prices. Producers have to increase prices of goods or services or they have to reduce their revenues. “Such service jobs cannot be moved overseas, and many, such as cleaning the floor of a McDonald 's, are hard to automate. These jobs will survive if firms can tolerate lower profits or raise their prices sufficiently”(Maximin). Most producers increase their prices and other reduce their workers. Some producers send their jobs overseas to get workers that will work for a lower pay. Most low-wage workers need a higher minimum wage so that they can keep up with the current cost of
Cities like Emeryville are raising the minimum wage to keep up with the cost of living. Other cities and states are looking and debating on whether they should raise the minimum wage. People want to raise wages to fight poverty. Some companies can raise the minimum wage and still make profits by raising the prices on their goods. Other companies decided to send their companies overseas and pay their new employees lower wages. One change in the economy can lead to other changes.
I.Price floor
A price floor is a government imposed price control or limit on how low a price can be charged for a product. Price floors are usually set above the equilibrium. The black market is an illegal market that sells illegal goods or services. …show more content…
Some examples are the cost of capital, wage rates, and the selling price of its output. Producers demand more jobs when wage rates are low. Producers demand fewer workers when wage rates are higher. Workers supply more labor at higher wages and supply less labor at lower wages. More workers enter the market when wages are high. Target is demanding fewer workers because it does not want to pay higher wages. “New Jersey restaurants increased, rather than fell, in response to a minimum wage rise”(Maximin). This article explains how workers are more willing to work at higher …show more content…
The minimum wage can cause a surplus of people wanting to work which creates a deadweight loss. Workers are more willing to supply labor at a higher minimum wage. Producers demand less labor at higher prices. Producers have to increase prices of goods or services or they have to reduce their revenues. “Such service jobs cannot be moved overseas, and many, such as cleaning the floor of a McDonald 's, are hard to automate. These jobs will survive if firms can tolerate lower profits or raise their prices sufficiently”(Maximin). Most producers increase their prices and other reduce their workers. Some producers send their jobs overseas to get workers that will work for a lower pay. Most low-wage workers need a higher minimum wage so that they can keep up with the current cost of