Economists consider the minimum wage to be a
A)blunt instrument of social policy
B)finely tuned instrument of social policy
C)universally bad idea
D)policy that has no impact on poverty

Question

Quizplus · Accepted Answer

Economists usually consider the minimum wage to be a blunt instrument of social policy because it sets a minimum price for labor without considering the differences in productivity and costs among businesses and regions. While it may help some low-wage workers, it also raises the cost of labor for employers and may lead to fewer job opportunities or more automation. Thus, economists prefer other social policies that target poverty reduction more precisely and efficiently, such as tax credits, education and training, or targeted transfers. Therefore, the minimum wage is not a finely tuned instrument of social policy, nor a universally bad idea, nor a policy that has no impact on poverty.

Economists Consider the Minimum Wage to Be a