ERIC Number: ED258857
Record Type: Non-Journal
Publication Date: 1983
Minimum Wage Laws: Who Benefits, Who Loses? Series on Public Issues No. 2.
Hobson, Margaret Jane; Maurice, S. Charles
It is the thesis of this booklet, one of a series intended to apply economic principles to major social and political issues of the day, that minimum wage laws actually hurt those whom such laws are designed to help. From this point of departure, separate subsections examine economic implications of minimum wage laws, including discussion of what determines wages and working conditions, individual hiring decisions, those who are affected by minimum wage laws, results of minimum wage laws, and those who support these laws. Following a discussion of who benefits and who loses, it is argued that when someone without job experience wants a job but is "not worth the going wage rate," the best way to induce firms to hire him or her is to offer to work for a lower wage until enough experience and training has been gained to enable the individual to ask for and receive higher wages in the future. The consequence therefore, of preventing untrained workers from accepting less than the minimum wage, is to prevent them from gaining experience. It is concluded that when wage rates for low skilled labor rise because of a law, firms choose to hire fewer low skilled workers, thus hurting those whom minimum wage laws were designed to protect. (LH)
Descriptors: Capitalism, Controversial Issues (Course Content), Economics, Economics Education, Employment Practices, Federal Regulation, Government Role, Higher Education, Labor, Laborers, Laws, Minimum Wage, Minimum Wage Legislation, Political Issues, Secondary Education, Wages
Public Issues, Center for Free Enterprise, Texas A&M University, College Station, TX 77843 ($2.00).
Publication Type: Opinion Papers
Education Level: N/A
Authoring Institution: N/A