Explain why a minimum wage is unfair
What will be an ideal response?
Workers who receive wage hikes and retain their jobs gain from the minimum wage but workers who lose their jobs and workers who must extensively search for a job lose. Those who keep (or find) jobs are not necessarily the least well off, so the minimum wage fails the fair results approach to fairness. And the minimum wage also fails the fair rules approach to fairness because the minimum wage blocks voluntary transactions that otherwise would occur.
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A decrease in the level of real GDP in the economy leads to
A) a leftward shift in the demand for money curve. B) a rightward shift in the demand for money curve. C) a leftward movement along the demand for money curve. D) a rightward movement along the demand for money curve.
Which of the following Federal Reserve policy tools is used most often?
a. Open market operations b. Changing the required reserve ratio c. Changing the discount rate d. Changing the prime lending rate e. Moral suasion