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A Cost-Benefit Analysis of Minimum Wages.
This study will look at minimum wages through a cost-benefit perspective. It makes no aims at solving the minimum wage debate, but does hope to provide the reader with a firm footing on the subject whereby s/he will be able to draw their own reasoned opinions and conclusions. For all readers, the unavoidable impression is that minimum wages, along with all price floors, interfere with the operation of market forces. In the case of genuine social problems, this is sometimes a good thing, when the benefits of intervention actually exceed the associated costs. With minimum wages, however, the results do seem to be at odds with the desired outcome. The evidence seems to suggest that minimum wages tend, on the whole, to increase unemployment in the low-skilled labour market; generally the very area that minimum wages seek to ameliorate. So, while the jury is still out on the effects of the minimum wage, it seems fair to say that regions that employ minimum wages should at the very least adopt a more cautious position on their use. 13 pages. 10 sources.
