Sunday, April 14, 2013

Minimum Wages

Im not agree with th insurance of b valueline wages and I tried to undrestand wheather it is good or not by using simple tools of economics:supply and demand. If prices go up , buyers bequeath buy less. Thus if labour becomes more than expensive , employers ordain hire fewer workers. On the different hand the higher the price suppliers receive , the more they give supply. So , higher wages increase the number of workers involuntary to work but decrease the number of workers employers will hire. And this causes a surplus of labour which means unemployment.

Another important portend is that, the minimum wage policy hits workers with limited skills, and young stack willing to work. For example , a poor kid whose preparation in an inner-city public school makes going to college unlikely, and whose best bank for gaining skills is theorise experience, is less likely to get a job because of the minimum wage policy. Employees will elect skilled employers quite an than a young, unskilled boy. Of course employees has nothing to do at this point. For example if we assume a employee (in a market which in that location is no policy of minimum wages)that will charge $10 for a skilled worker, while each of the unskilled workers will be charged only $4.

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In this case the employee will hire the two unskilled workers because, in total, it costs him $8 for the unskilled workers whereas it would cost $10 for the skilled worker. But when there is a policy of minimum wages the employee will prefer the skilled worker since he will pay equal wages for each. The result is unemployment of the unskilled workers. And in my opinion , the policy of minimum wage increases the poverty in a res publica because of the problem of unemployment.

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