Minimum Wage Rate

Context of Minimum Wage Rate

The term minimum wage rate, mainly states, the (least) minimum or in economic terms floor price, which is set by the government for the labours in the local market. However, in order to show its effect, the wage rate ought to surpass the clearing price of the market. In this situation, the market demand of labour ought to match with the supply of labour (this means those people willing to pay their work force at the clearing price and those employers who are ready to wage that price). However, in theory, minimum wage rate, which is way far above the clearing price of the market, means an increase in the supply. On the other hand, when the supply exceeds the market demand it eventually results in unemployment in the region. Nevertheless, assumed that the workforce is a supply which is seldom cut back with no serious understanding, demand will be inelastic, which means that it will not alter much, thus limiting the unemployment in the market place. The minimum wage rate in a country gives influential business an extra incentive to systematize the responsibilities of up to that time, which were held by human beings (Akyeampong, pp: 12).

Now here, how big impact on minimum wage rate is purely depending as to how relaxed it is to supernumerary resources for the workforce, to what extent it is greater than the clearing price of the market. The main thing which relies here is on the economy, it is essential to identify whether the economy is booming or whether it is in recession. Despite the fact, that, least incomes are nationwide; however, there is similarly an international dimension to reflect with concern to charges of manipulation of inexpensive and low price labour form the third world countries (Gunderson et al, pp: 26).

One of the main advantages here is that a low paying employment is an admission point for all those people who possess few marketable talents and prowess. Eradicating or putting an end the minimum wage rate concept will allow industries to attain greater expertise and lesser charges. The term minimum wage rate is nothing blunt instruments, which damage all those who are vulnerable and weak. However, on the other hand, it is essential to understand that small firms are unable to afford and pay such amount. Whilst the lesser levels of salary for fresher work force does not at all prevent acumen against hiring such people as the least is respectively greater than the standard for elder and experienced workers. On the other hand, a better substitute for this is a besieged system encompassing if tax credits that not only reduce trap of poverty but also helps people improve their living. This is done mainly by making nature of work much lucrative as compared to its benefits, and this helps in ending the trap of unemployment by covering up low salaried with help to meagre salary households (Freeman, pp: 831).

Pros of Minimum Wage Rate

Following are the main ...