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The Pros And Cons Of Increasing Minimum Wage

368 Words2 Pages

According to the law of supply and demand, when a good goes up in price the demand for that item will decrease. In the labor market, labor is a economic good, when the price for labor goes up the demand will decrease. When setting a price floor, in which the price cannot dip below that rate, there will be a surplus of that good if the price floor is above the equilibrium price. The equilibrium price for low skilled labor in many areas is above the federal minimum wage, but in the areas that this is not true there have been large amounts of unemployment following dramatic increases in the minimum wage (Soergel). When a higher minimum wage is enacted the number of available jobs for low skilled workers will decrease. The amount of money spent

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