Question

suppose an analyst evaluates whether it is a bad ides to pass minimum wage laws

Answer 1

Minimum wage has both its pros and cons.

Minimum wage protects workers from exploitation of working at a very less wage rate,thus increasing overall level of income and standard of living.

But it also creates surplus labour, because at a higher wage rate supply of labour exceeds demand for labour.This creates unemployment.

We have to evaluate the costs and benefits of minimum wage and then implement the most effective policy.