Assume that Congress is considering a law that would set the minimum wage above the market-clearing wage
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Assume that Congress is considering a law that would set the minimum wage above the market-clearing wage for teenagers but below that for adult workers. Using supply-and-demand diagrams, show the impact of the minimum wage on the employment, unemployment, and incomes of both sets of workers. Is any unemployment voluntary or involuntary? What would you recommend to Congress if you were called to testify about the wisdom of this measure?
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Consult Figures 292 and 293 The first shows the teenage job market with a minimum wage wmi...View the full answer
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