Microeconomics - The national minimum wage Flashcards
What is the national minimum wage an example of
a min price
The minimum wage has to be set above the free market price, just like other minimum prices, otherwise it would be ineffective.
negatives of national minimum wage
It could make it harder for young people to find a job, because their lack of
experience might not be valuable to firms who are paying more for their labour.
A higher wage could make the country less competitive on a global scale, since they
cannot compete with countries that have lower wages.
positives of a national minimum wage
The NMW will yield the positive externalities of a decent wage, which will increase
the standard of living of the poorest, and provide an incentive for people to work.
The government might make more tax revenue, due to more people earning higher
wages.
