Minimum Wage laws are classic examples of price floors. We teach (well most of us) that if price floor is set above the equilibrium price it cause a surplus. A surplus of labor is also called unemployment. So one might argue that minimum wage laws have employment effects, well if you still believe that supply curves slope upward. One might argue about the size of those employment effects, but I think most of us still believe they exist.
For a great discussion of the real world consequences of minimum wage laws for one particular employer click here.
Despite this our two mayoral candidates both favor raising the wage locally.
Keywords: Price Floor, Minimum Wage, ECO120
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