Buy essay on PRICE CONTROL- THE MINIMUN WAGE

Nowadays, the minimum wage affects the labor of low-wage employees. Recently, it was believed that the market is not able to establish “fair” prices for the work done. Consequently, the only way to solve this problem is to change the administrative structure of wages and redistribute the incomes.
Thus, this paper introduces the information on the minimum wage and its price controls. It analyzes costs and benefits to an economy of a minimum wage law, and provides the argument in support of minimum wage laws or against the use of minimum wage laws to improve standards of living based on the analysis.
To start with, the minimum wage is the legal rate in the form of the lowest hourly, daily, or monthly compensations established by the state that the employers have to pay to their employees. The meaning of the minimum wage is not always associated with the living wage. In each period of time, it is determined by the financial possibilities of the state, and thus periodically varies (nominally, it always increases).
This is a widespread fact that there are some costs and benefits to the national economy of a minimum wage law. Let us focus our attention on some of them.
Costs to the national economy of a minimum wage law:
 Similarly to protectionism, the minimum wage reduces the competition in the labor market, impedes different firms in reducing the costs during economic downturns, resulting in different economic inefficiencies as well as poverty, unemployment, dysfunctions, and price rises as a whole;
 Causes damage to small businesses rather than big ones;
 Reduces a labor demand, either by reducing labor days or by job cuts;
 Leads to price inflation since businesses seek to recoup the losses with the help of increasing the prices of the goods;
 Encourages some employees at the expense of least productive ones;
 May lead to the exclusion of some groups or individuals from the labor market;
 Give no reasons for the poor in obtaining additional education that will give them a good opportunity to get a proper job.
Benefits to the national economy of a minimum wage law:
 Increases the standard of living for the most vulnerable citizens, and thus increases the average standard of living;
 Motivates and inspires the employers to work harder and more productively (as opposed to social programs and other similar charges);
 A business can spend less money on training their employees due to low turnover rates.
 Reduces the social costs of the state because of the increased income of the poorest.
Based on the analysis of this paper, it should be argued against the use of minimum wage laws because they can cause unemployment and raise the number of employees working at the black market. Supporting this point of view, it is possible to say that McCormick and Block (2000) stated that “the minimum wage does not positively affect the long-run earnings of Americans… In reality, the minimum wage causes unemployment and other problems”
(p. 79).
In turn, Lester, Madland, and Bunker (2011) emphasized that “increasing the minimum wage helps ensure employees are rewarded for their hard work and boosts the incomes of low-wage workers—something that is sorely needed to increase consumption and get the economy going” (para. 2).
In conclusion, it is possible to emphasize that minimum wage laws have more disadvantages and costs than benefits to the national economy. The minimum wage is less effective and useful in fighting against poverty and can cause more damage to businesses than other different methods.
References:
McCormick, P., & Block, W. (2000). The Minimum Wage: Does it Really Help Workers. Southern Connecticut State University Business Journal, 15 (2), 77-80.
Lester, W., Madland, D., & Bunker, N. (2011, June 7). An Increased Minimum Wage Is Good Policy Even During Hard Times. Retrieved October 9, 2011