Minimum wage increases are intended to benefit low-skill workers, yet unions that represent high-skill workers (electricians,...

Minimum wage increases are intended to benefit low-skill workers, yet unions that represent high-skill workers (electricians, carpenters, plumbers, etc.) are typically strongly in favor of minimum wage increases. Why?

Expert Solution

it is true that the increase in the minimum wage rate is intended to raise the standard of living of especially low skilled workers. But from the employers' point of view, when the legal wage rate is increased, the total cost of employees they hire, increases. Employers can either replace low-skilled workers with machines or with the highest skilled workers depending upon which is more costly.

Generally, an increase in the minimum wage rate encourages the employers to replace the low skilled workers with a high skilled workers to maintain the productivity that is required to compensate for the increased wage bill. due to this reason the unions that represent high skilled workers are always in the favour of minimum wages increases.

Rahul Sunny answered 2 years ago

What is the BENEFIT to low wage workers (workers whose wage is near the minimum wage)...

What is the BENEFIT to low wage workers (workers whose wage is near the minimum wage) of raising the minimum wage?

How might these policy changes affect the wage gap between low-skill and high-skill workers in the United States?

How might these policy changes affect the wage gap between low-skill and high-skill workers in the United States? Subsidies paid to businesses to introduce robots into the production process.

If the government imposes a minimum wage that increases wages for workers employed by the firms...

If the government imposes a minimum wage that increases wages for workers employed by the firms participating in the market, what happens to the inverse supply function? what happens to the equilibrium price of products traded in this market?

How to reduce the big gap of divergence between high and low skill workers? In The...

How to reduce the big gap of divergence between high and low skill workers? In The New Geography of Jobs written by Moretti, he claimed that globalization and automation trends have exacerbated the differences between highly skilled and low-skilled workers, therefore creating a series of problems that might result in potential damage to the labor market. For low-skilled workers, some of them have to leave their job because human capital values more for companies right now. Those steps that traditionally...

Iceland has no minimum wage. Instead, employers negotiate salaries with collective groups or unions who represent...

Iceland has no minimum wage. Instead, employers negotiate salaries with collective groups or unions who represent the employees. You must be 18 to work full-time in Iceland. However, mandatory school ends at age 16 and teen workers between the ages of 15 and 18 are highly unemployed. Salaries are high in Iceland because of the small population, universal health care, the high cost of living, and the fact that 88% of the population lives in and around the capital, Reykjavik....

True or false: minimum wage always increases the welfare of workers. Explain your answer with a...

True or false: minimum wage always increases the welfare of workers. Explain your answer with a graph.

Suppose that the U.S. government increases the legal minimum wage. Assume that most of the workers employed in the production of coffee are paid the legal minimum wage rate.

write a paragraph addressing question below and create a basic graph describingSuppose that the U.S. government increases the legal minimum wage. Assume that most of the workers employed in the production of coffee are paid the legal minimum wage rate.Will this affect the supply or the demand for coffee? Why?Which determinant of demand or supply is being affected?Create a graph with before- and after-curves on the same axes.How will this change the equilibrium price and quantity of coffee, assuming all...

What is your opinion of the minimum wage? Is it too high or too low? Explain....

What is your opinion of the minimum wage? Is it too high or too low? Explain. If the current minimum wage is above what the market would ordinarily bear (equilibrium wage in that market), and there is a proposal to raise the wage, explain the economic effects of the proposal on wages, employment, product prices and costs of the products the minimum wage labor produces (a graph may be useful here). How important is the assumption of the proposed wage...

Minimum wage laws are usually defended as a way to reduce poverty among low skilled workers.

Minimum wage laws are usually defended as a way to reduce poverty among low skilled workers. Do you think it reduce poverty among all low skilled workers? Might it increase poverty for some workers? Explain.

Exercise 4. Cost Minimization Short and Long Run (Minimum Wage Workers) McDonald’s employs minimum wage workers...

Exercise 4. Cost Minimization Short and Long Run (Minimum Wage Workers) McDonald’s employs minimum wage workers operating registers to take orders. Let y be the output of orders taken in an hour, L be the number of minimum wage workers working the registers, and let K be the number of registers. The production function is y=100∙L½K½. Let the number of registers, K=4, be fixed. Are there diminishing marginal returns to labor? Explain why, and find ∂y/∂L. Let the number of...

Question