dingodan
New member
- Feb 16, 2011
- 10,080
If we believe that it's wrong to employ anyone for less than £8ph and we pass a minimum wage law, does it have the effect of guaranteeing that everyone is paid at least £8ph? Or does it have the effect of reducing the number of people in work?
Imagine a person at the lower end of the skills/experience spectrum could have been employed at £6ph, chosen over a more experienced applicant who would have commanded £8ph. But with minimum wage laws the employer will be paying £8ph regardless, and so has no incentive to employ the person with less skill or experience. Under these conditions the minimum wage law has only served to give the low skilled worker no basis on which to compete for the job.
That's the theory, makes sense to me, what to you think?
A better explanation:
Imagine a person at the lower end of the skills/experience spectrum could have been employed at £6ph, chosen over a more experienced applicant who would have commanded £8ph. But with minimum wage laws the employer will be paying £8ph regardless, and so has no incentive to employ the person with less skill or experience. Under these conditions the minimum wage law has only served to give the low skilled worker no basis on which to compete for the job.
That's the theory, makes sense to me, what to you think?
A better explanation: