Minimum Wage: A Weaker Case Both For and Against.

This article discusses the concept of minimum wages for the employees and highlights different views in favor and against an increase in the minimum wage. Not many economists favor increasing the minimum wage. Surely there are no economists in the free market camp who have a kind word for governmentally imposed floors on wages. The minimum wage is seen as the source of artificial distortions in the labor market that prevent resources from being directed into theft of most valuable employments. Certainly advocates of the minimum wage can take no comfort in the fact that economists have overstated the facts. Economists are uncharacteristically naive regarding the connection between government promise and performance in the case of the minimum wage. An increase in the minimum wage is government's promise that low productivity workers will receive an increase in their hourly compensation. The standard economic criticism of the minimum wage assumes that government is able to deliver on this promise. Tax system taxes monetary compensation but does not tax fringe benefits. This has motivated the substitution of fringe benefits for money wages beyond that point where pre-tax marginal values are equal.