Price Floors on Minimum Wage Causing Unemployment Essay

A price floor is taken to be the legal minimum wage by which the government is not able to allow the price of a service or good to decrease below the" floor." Other forms of punishments occur due to buyers are not able to pay less than the floor price on the different fines. In a pure market economy, there are goods and services perceived to be taken into consideration for the sellers to have a higher price for their services and products. The primary recipient of price floors is the labor for most western countries. There are minimum wages employed by the government to help to control the employer from paying fewer amounts of payments to the employees in any given organization. The minimum wage is taken to be the most recognizable and popular illustration of the price floor. Different analyses are acted upon on the perceptions of the study of services and goods used for different implications (Bardach, Eugene 64). The price floors and price ceilings have so many consequences that are unintended thus there are many policies on the proponents of controlling unskilled personnel. It has some effects on the glut since the labor for unskilled is equal to quantity demanded by employers. The untrained staff supplies the amount to the job being done.

For instance, if the nation sets out a market level for clearing, it will automatically induce the surplus of the labor produced by the unskilled personnel. Thus, there will be a gut supplied, illustrating more workers trying to get jobs as per the wage more than the employers might want to hire. The situation created to lead to the popularity of an instance taken to be unemployment. The law on the minimum wage does not allow an employer to deploy lowly-skilled personnel. The general meaning of this is on the illegal hire of any applicant for the less than the set limit on the minimum wage of any employee. The employer is made to have a hard time due to the law of penalizing of any objection on the job applicants (Krugman, Paul et al. 76). Thus the employer gets it challenging to give somebody a job on whatsoever instance presented to him or her. Most employers hire the employees on the expectation of bringing in much revenue as compared to the payback. On the rise of the bar on the paycheck minimum by the government, it shows that there is an active effort to make the chances of individuals with productivities to lower to a certain level of not getting a job (Nechyba, Thomas J 83).

For the employer to earn more profits, he or she will not hire any person since there is a loss on the minimum wage of the price floors set by the government. For example, if individual works for 7 dollars per hour and the state has put a minimum wage of 8 dollars per hour, there will be created insurance by the employer of 1 dollar per hour. By enacting of a minimum wage, the state doesn't put into consideration the issues dealing with the different impacts as the reality is concerned. It remains that there is no competition since it is non-wage pressure on the new jobs that evolve daily. The workers still find themselves competing on job opportunities that may get opened. The fact on the minimum wage law makes the workers to be seized and prone them to vulnerability for the need of employment (Tragakes, Ellie 97).

Conclusion

In conclusion, the price floors on the minimum wages can lead to the creation of unemployment to the most populations. The laws on minimum wage contradict by trying to help the workers, but in the long last they remain to get unemployed thus making their living standards hard.

Works Cited

Bardach, Eugene. A Practical Guide for Policy Analysis: The Eightfold Path to More Effective Problem Solving. Los Angeles: Sage, 2012. Print.

Krugman, Paul, and Robin Wells. "International Trade." (2006): 406-430. Print.

Nechyba, Thomas J. Microeconomics: An Intuitive Approach. , 2017. Print.

Tragakes, Ellie. Economics for the Ib Diploma. Cambridge: Cambridge University Press, 2012. Print.