Essay On Should Minimum Wage Be Abolished

Minimum wage was first established in 1938 by Franklin Delano Roosevelt, in an attempt to stimulate economic growth and create a better standard of living for the lower class. This attempt was fairly successful, but also has many consequences. You may be asking yourself, “how on Earth could setting a limit on how little you can pay someone be bad?” On the surface this statement seems logical, but if we delve deeper we begin to see many negative effects on the implementation of minimum wage. In our nation the minimum wage law almost seems out of place, like it doesn’t quite fit in. The reason for this, is the core mechanics within a market economy. A market based economy is defined as “an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.” (Merriam-Webster) As you can see minimum wage does not follow this rule of competition and the decisions of private investors. It is in the economy’s best interest to abolish minimum wage because it will cause an increase in employment, stimulate economic growth, and allows for an easier escape

Many people will try to state the fact that employers will simply pay an extremely low rate, but this is simply not the case. The reason we are able to infer this is due to the principle of supply and demand. With such large economic growth, there will immediately be a demand for labor. Whenever you have a high demand for an item, you will see an increase in price and a decrease in abundance. As the competition for labor increases, the laborers will end up with better wages then they had to begin. These laborers then begin to spend their now higher wages furthering this economic