What would happen if there were no minimum wage laws in the United States?

Answer: If minimum wage laws were repealed, the vast majority of U.S. workers would not have their wages impacted. If a firm perceives that certain employees are not productive enough to warrant the higher mandated wage, these employees may find themselves out of a job – or not hired in the first place.

What happens if you remove minimum wage?

Abolition of the minimum wage will harm the most vulnerable and lead to abuse by owners. The fact is, paying poor wages attracts poor workers, workers without options and workers without skills. All that leads to poor service, poor quality and low productivity – which starts a cycle that is hard to break out of.

What happens if the minimum wage is higher than the equilibrium wage?

If the equilibrium wage is higher than the minimum wage (price floor), then the minimum wage has no discernable effect on the market, since the equilibrium point will be above the minimum wage.

What happens if a minimum wage is imposed in a monopsony labor market?

KEY TAKEAWAYS. In a competitive labor market, an increase in the minimum wage reduces employment and increases unemployment. A minimum wage could increase employment in a monopsony labor market at the same time it increases wages.

Do companies have to pay minimum wage?

Most employers must pay their workers at least the federal minimum wage. Federal law requires employers to pay all employees a minimum hourly wage, currently $7.25 a year later. Each state is also free to impose its own minimum wage (and most do).

Which countries do not have minimum wage?

Five developed nations without legal minimum wage requirements are Sweden, Denmark, Iceland, Norway, and Switzerland.

Is China’s minimum wage inequality getting worse?

At the lowest end, the minimum wage in Hunan (RMB 1,130/US$174 per month) and Anhui (RMB 1,150/US$177 per month) is slightly higher than Liaoning’s (RMB 1,120/US$172 per month). However, while China is still among the most unequal countries in the world in terms of income inequality, it has made some progress over the past decade.

What would happen if minimum wage laws were repealed?

Answer: If minimum wage laws were repealed, the vast majority of U.S. workers would not have their wages impacted. Through supply and demand, competitive market forces drive up the wage rates of most workers to levels considerably above the current federal minimum rate of $7.25 an hour (or the somewhat higher minimums imposed by many states).

Are minimum-wage workers poor?

Based on data from the Bureau of Labor Statistics, about half of all workers paid the minimum wage are teenagers or young adults under the age of 25, most of whom live in households with incomes far above the poverty line. To be sure, older workers earning the minimum wage are more likely to be struggling financially. Still, many are not poor.

How much do foreign workers earn in China’s economy?

As China’s economy moves up the value chain and transitions to innovation and services, most workers employed by foreign-invested enterprises earn above the minimum wage. For example, workers in Shanghai made an average of RMB 9,580 (US$1,475) per month through 2019 – nearly four times the local minimum wage.