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Minimum Wage Legislation Essay

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Minimum Wage Legislation Essay
Nowadays, the minimum wage legislation has been an increase in very many countries (Exclusivepapers, n.d.). According to Law Pay Commission (2006), a minimum wage is the lowest wage that each employee can legally get from an employer in hourly, daily or monthly basis. This is the lowest amount at which workers can sell their labour. By each country independently having their laws, there has different opinions regarding the merits and the demerits of the minimum wage legislation. This essay will illustrate and explain the possible effect of the introduction of minimum wage legislation on labour markets which involve relevant skill mixed over time with the use of diagrams. In addition, whether the minimum wage legislation has a positive or negative impact on the standard of living of people in poverty will be discussed.
Minimum wage behaves as a classical floor on labour. According to the analysis of the demand and supply curve of labour, if set above the equilibrium price, …show more content…
The minimum wage will not affect those with high skills while in the long term the minimum wage will influence those with low skills. In addition, whether the minimum wage can have positive or negative impact on well being of people is dependent on how the government to use the minimum wage policy according to their national conditions. It is suggested that if the minimum wage policy is designed to take more workers, employers and market price into account, the positive side of minimum wage will be expanded such as reducing poverty. However, if the minimum wage is set randomly, the minimum wage will probably expand the gap between the rich and the poor including those who are excluded by the minimum wage and cannot reach the original effect brought by minimum wage, causing the negative effects such as unemployment for those unskilled and low standard living of people living in
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