Minimum wage

What effect would you expect minimum wages to have on the attainment of job experience and training of the young

A minimum wage has effects on the labor market . When a minimum wage is established , an employer is bound to pay his employees a higher wage . A rational employer would only hire a new employee if his or her marginal revenue product is higher than that of the wage . As a consequence of this preference by the employee , the demand for labor will significantly decrease in response to the increase in wages brought

by the new minimum wage (Sharp , Register and Grimes , 2003

Individuals who have been retained in their jobs clearly benefit by the increase in wage brought by the new minimum wage . However , with this increase in wages , some are laid off as demand for labor declines

As mentioned , some individuals lose their jobs when minimum wages are established or increased . Among those who are hardly hit by this consequence are the teenagers . Not only that these youngsters are to lose their jobs , they will also lose the training and the experience that they are about to gain in their respective jobs (Sharp , Register and Grimes , 2003

Since employers are only willing to hire individuals with higher productivity or those people whose marginal revenue product is higher than the wage , the young people who were only about to begin their careers and are lacking in-depth training and experience are definitely out of the choices

The training and experience...