Sep 23 ยท Last update 1 mo. ago.

What are the Pros and Cons of a minimum wage?

Despite a minimum wage legislation being in place in most countries around the world, the values and drawbacks of such legislation are still debated by economists, politicians and business people. Wage limit legislation actually started with a maximum wage in England in the 14th century, following the decimation of the labour market by the Black Plague a maximum wage was used to control the soaring wages used to attract the few surviving workers. However it wasn't until the 1890s that Australia and New Zealand passed what could be described as modern minimum wage laws. Why do minimum wage laws remain fairly controversial if they are so widespread? What are the pros and cons of a minimum wage? What is the evidence we have for these? For the cons, what are the alternatives?
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Pro: Increases the standard of living
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Pro: Increases the standard of living

Increasing the minimum wage in a society has been found to reduce poverty amongst the most financially vulnerable, which helps to reduce inequality and also boost morale amongst low paid workers. Numerous studies have found that raising the minimum wage raises the average incomes of families at the bottom of income distribution curves, removing financial stress from such families, while encouraging education resulting in better jobs in the next generation. This increase in the standard of living in the poorest and most vulnerable of a given society will only help to raise the average living standard, making a richer society, with more incentive to seek legitimate employment and less state dependence for income.

aeaweb.org/articles?id=10.1257/app.20170085 epi.org/publication/bp178 nber.org/papers/w16355.pdf emerald.com/insight/content/doi/10.1108/01437729410059305/full/html web.archive.org/web/20160809005911/http://www.epi.org/blog/raising-the-minimum-wage-could-improve-public-health

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