Economics - Minimum wages

Minimum wages is a price floor set by the government. This regulation makes hiring labour below a specified wage illegal. The governments` intention by setting this price floor is to elevate the wages of unskilled and low-paid workers and lift them from poverty. But there is disagreement among economists whether this legislation really benefits the pour in the long run. Some actually means that minimum wages causes unemployment. In the labour market the employers will …

…being exploited. But the regulation also raises economic issues. I think that the government should be careful with regulate the market force. When the government set the regulation it is important that the new minimum wages is not to fare above the equilibrium, in order to moderate the effects. The inflation has made the minimum wage regulation not so topical any more, because it is below the equilibrium wage level in many unskilled labour markets.