A binding minimum wage raises the incomes of those workers who have jobs,but it lowers the incomes of workers who cannot find jobs.

Question

Quizplus · Accepted Answer

A binding minimum wage sets a minimum wage rate above the equilibrium wage rate, leading to a reduction in demand for labor and an increase in unemployment. As a result, some workers may lose their jobs or face reduced work hours, leading to a lower income. Therefore, while minimum wage raises the incomes of some workers, it can also lower the incomes of those who cannot find employment due to the minimum wage mandate.

A Binding Minimum Wage Raises the Incomes of Those Workers