Minimum Wages Essay Example | Topics and Well Written Essays - 1500 words

Minimum Wages - Essay ExampleThe workers who are having relatively more expertise in a certain job than the unskilled ones are categorized in semi skilled commercialise. (A) With the use of diagrams illust mark and explain the likely effect of the submission of minimum betroth legislation on labor markets over time. Answer The rates of minimum wage can vary across jurisdictions. The concerned administration are entitled to set the minimum amount of wage for the workers. The indicators that minimizes the loss of jobs as well as maintains international competitiveness is used to set the initial minimum wage. The general economic conditions like real and nominal rates of gross domestic product, the supply and demand of labor force, and the level of inflation vivacious within the economy, the different terms of employment and costs of labor and business operation, the standard of living are taken into consideration as well. In a perfectly competitive labor market many firms are in controversy in hiring workers. The firms lack the power to set wages and the wage rate is determined by the market. If a firm deviated from that wage it losses by paying higher and gains if it pays lesser. In employer dominated labor markets there is a allurement of some small local markets. Some firms enjoy the dominant position and a major employer has the capability to set the wage rate for the workers without the fear of competition from other firms (Flinn, 2010, p. 3).. In both the cases there are large numbers of workers and each of them has a reservation wage. The worker may not work if the wage rate is below his reservation wage. The relationship between the participants in the labor market and the market wage is regarded as labor supply and denoted by the upwardly sloping disregard. The effect of the introduction of minimum wage legislation depends on the type of labor market. The employers power on wage decisions is dependent on whether the market is competitive or not. Two scenarios can be taken under consideration. The diagram below shows two market structures. Bothe panels have the supply and the demand curve for labor. The wage rate is depicted on the X-axis while total labor force N is depicted on the