Stanford University Effects of Minimum Wage Laws Discussion


Discussion Topic 1: Minimum Wage Laws

For this discussion, you will research the minimum wage laws. Your response must include a discussion of both the advantages and disadvantages of minimum wage laws.

For example, you might consider these differing perspectives as you approach your research:

Perspective One: The U.S. Department of Labor has imposed a minimum wage since 1938. Most states mandate minimum hourly wage rates, too. Minimum wage legislation inhibits an employer from setting wage rates below the directed amount. Although the goal is to help workers, significant research reveals that minimum wage laws actually do more damage to employees and the overall U.S. economy. Minimum wage laws predominantly suppress employment opportunities for entry-level workers, youth, and minorities, the groups that legislators and activists proclaim to be helping with these policies. Although higher minimum wages may attract more workers, if there are no jobs to fill, that work-force supply increase will still exceed the demand for workers, thereby exacerbating the problem of unemployment.

Perspective Two: Some researchers suggest that a higher minimum wage rate attracts more workers and reduces an employer’s job vacancy rate; in addition, decreased turnover will increase productivity and reduce the overall cost of expanding employment.