Minimum wages and unemployment level Essay Example | Topics and Well Written Essays - 2000 words

Minimum wages and unemployment level - Essay Examplein the amount of minimum wage brings about reduction in the employment levels evidently seen with employment elasticity ranging from -0.1 to -0.2 amongst the teenagers and from -0.15 to -0.2 for the youths (Charles, 2002, p 89).Employers in a firm are bounded with the minimum wage law which is meant to prevent the employers from paid their employees rate below the minimum wage. This law is widely partd in the present day countries. In UK and the USA, this law was only applicable to the women and the children. The extended use of the law was influenced by the period of the great depression. If the objective of the minimum wage was to ensure that employed achieved a worthy standard of living, then some edible had to be made for those who are retrenched (Flinn, 2010, p58-62).During the imposition of the minimum wage by the prudent bodies, firms within that jurisdiction would not be permitted to pay less than what the responsible bo dy mandates, for any service that they have received. For instance, this is when the governing body passes legislation that is meant to raise the wage bill from its initial of $6.72 per hour to $8.0 per hour. In line with the preceding(prenominal) minimum wages, at $8.0, supply of the labour service was 70,000 hours, but only 50,000 hours was what was in demand by the firms. Within a market with voluntary trade, the decisions of firms to exact its employees cannot be influenced with an external body, reason being the quantity of labour needed is normally established through the desire of the firm to buy but not the desire of the workers to sell (Joshua, 1999, p 123).Through the above discussion there is an assumption that, increasing the amount of minimum wage in a country, the enactment of employed individual would increase. In addition, there is an emerging possibility that everyone would be able to get a job. However, the number of hours that they initially worked would be red uced. Putting this grounds into consideration, there would be rise in