Economic help!?

Analyze the impact of an increase in the minimum wage from the current level to $10 per hour. How would the following be affected?

A. employment of people previously earning less than $10 per hour.

B. the unemployment rate of teenagers

C. the availability of on-the-job training for low-skilled workers

D. the demand for high-skilled workers who are good substitutes for low-skilled workers.

Economic help!?

If the increase in the minimum wage rate is marginal i.e, just about the inflation rate and the employers profit margins have not declined or increased because of inflation, the impact on employment of labor is not likely to be affected. If the economy is growing and corporate earnings are growing, small rise in wages will be easily absorbed and employment may grow rather than fall. If the economy is entering recession there would double effect as cost of labor rise and need for labor will fall. Actual economies function on the interplay of different factors. However, the theoretical answers are:

A. The employment of people previously earning less than $10 per hour.should decline unless of course the employers find it better to recruit more minimum wage workers toi substitute those who were previously earning wages higher than $10.

B. The unemployment rate among teenagers may increase because employers unless emploers find it cheaper to use teenagers to replace more costly permanent and fulltime labor.

C. The availabilty of on the job training for low skilled workers should decline if the on the job-training costs rise in sympathy with the rise in minimum wages, but will increase if the employers find it economic to take more on the job trainees to replace some of the more costlier low skilled labor.

D. The demand for high-skilled workers who are good substitutes for low-skilled workers will normally be unaffected unless their wages tend to rise.in sympathy with the rise in the minimum wage rate.

Thus much will depend on the extent of increase in minimum wage rate, the subsitutibity of teenages in unskilled jobs, the subsitutibity between low skilled and hogh skilled workers across the chain, the relative rise in wage rates following the increase in the minimum wage rate, the inflation rate/ cost of living index, the phase of the business cycle in the economy and the corporate earning growth.

Economic help!?

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Unemployment will increase, because there will be less demand for laborers at minimum wage.

Teen unemployment will skyrocket, becuase their help is not as valuable as that of skilled workers.

On the job training will be costly, therefore employers will seek to hire someone who already has experience.

Demand for skilled laborers will increase, while unskilled laborers will decrease.|||The minimum wage is nothing more that a price control in reverse. Higher min wage = more supply of workers willing to work, and less demand by employers willing to hire.

A price control increases demand among those willing to pay, and decreases supply in those willing to produce.

A. = lower

B = lower

C = higher

D = higher

See: ECONOMICS IN ONE LESSON http://www.mises.org/books/onelesson.pdf