Study on the Effectiveness of Minimum Wage and the Necessity of Abolishment by Countries
- 10.2991/assehr.k.220110.029How to use a DOI?
- Minimum wage; Germany minimum wage reform; Efficiency; Equity; Policy
In this paper, the question of whether it is necessary for countries to abolish minimum wage policy is discussed in depth. This paper carries out 3 sections of theoretical discussion: the economic theory of minimum wage diagram, the impact on the economy’s efficiency, and the impact on social quality. In the section of the economic theory of minimum wage diagram, this paper concluded it is not possible to avoid loss in employment while imposing a minimum wage due to the downward sloping of demand curve. However, it is also concluded in the next section, an imposing of minimum wage does not always decrease the economy’s efficiency. However, lots of theories supported the idea of imposing a minimum wage that can actually improve efficiency. The impact on social equality is very complex, and greatly depending on the policy’s quality and effectiveness in reducing inequality. The impact of minimum wage can be either positive or negative. A case study of minimum wage reform in Germany is then illustrated, analyzed. Germany, as a country with relatively less elastic labour demand, its minimum wage reform greatly improved its social quality level. Therefore, it is concluded, countries with specific achieved conditions should not abolish the minimum wage policy. However, the limitation of minimum wage is still pretty significant. As an imposing policy, a vast number of considerations should be taken into account.
- © 2022 The Authors. Published by Atlantis Press SARL.
- Open Access
- This is an open access article under the CC BY-NC license.
Cite this article
TY - CONF AU - Hongchao Fei PY - 2022 DA - 2022/01/28 TI - Study on the Effectiveness of Minimum Wage and the Necessity of Abolishment by Countries BT - Proceedings of the 2021 International Conference on Public Art and Human Development ( ICPAHD 2021) PB - Atlantis Press SP - 148 EP - 152 SN - 2352-5398 UR - https://doi.org/10.2991/assehr.k.220110.029 DO - 10.2991/assehr.k.220110.029 ID - Fei2022 ER -