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Explain why an effective minimum wage law that is not changed over time may eventually become...

Explain why an effective minimum wage law that is not changed over time may eventually become ineffective as demand for workers increases.

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An effective minimum wage law will set the minimum wages in the market a little above the equilibrium wages in the market to be effective, At this price the supply of the labor will be more than the demand in the market. A shift it in the demand curve or an increase in the demand will make it ineffective as shown in the graph below.

here, the initial minimum wage was at $15 that is $5 above the market price, but as the demand in the market increase and the demand curve will shift to the right and the new equilibrium will be at $15 which was the minimum wages in the market. Here, to make it more effective the minimum wages should be at $20 or at least higher than $20.

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