Minimum Wage

Minimum wage is the smallest amount of hourly rate mandated by federal law that an employee may be paid. Some people believe minimum wage is a good idea and should be encouraged rather than abolished, for workers need a minimum amount of income to survive. If the minimum wage were not in effect, adults who currently work for minimum wage would likely lose their jobs to teenagers who would work for less, and businesses would have more power to abuse the labor market. However, the disadvantages of having a minimum wage act outweigh its benefits in terms of job loss, efficiency and lower prices of goods. (Krueger, pp.45-58)

Abolishment of the minimum wage would mean more citizens and fewer illegal immigrants would be hired for low-pay hourly jobs, leading to greater tax revenue and fewer incentives for illegal immigrants to enter the U.S to work. The unemployment rate would decline as a result of fewer illegal immigrants occupying the jobs and filling the quotas, thus reducing immigration. There would be no incentive for illegal immigrants to break the law and enter the U.S to compete with citizens and legal immigrants. Furthermore, if the minimum wage were eradicated, employers and employees would be able to negotiate wages that are mutually agreeable to both parties. For instance, commercial farmers would be able to employ legal workers for far less than minimum wage as compare to undocumented workers. (Kosters, pp.92-114)

Minimum wage costs the economy thousands of jobs. The law of supply and demand is the most fundamental principle that governs every economy and should be applicable to wages. In other words, the higher demand for labor, the higher the wages. Most employers are willing to pay more to get their jobs done effectively when the demand for labor increases and less when ...