Andrew Cuomo Raising Minimum Wage

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Gov. Andrew Cuomo raising the minimum wage does not take in account macroeconomics and the resource market; (supplies businesses the resources they need in order to produce goods and services. Common resources include labor, capital, land, natural resources, and entrepreneurship). This allows for workers to exchange their human capital with firms for wages. Firms must have labor to produce the goods and services that they sell. In the resource market firms become the demanders and workers become the suppliers. When the supply of labor in New York is equal to the demand for labor, the market is in equilibrium. When the labor market is in equilibrium that means that wages are currently at the market rate (for goods or services is the usual price charged for them in a free market. If …show more content…

This is very similar to a price floor because it is set above the market wage. The Gov. is concerned about unskilled workers and imposes a minimum wage of 15 dollars as an attempt to help those workers who have trouble paying the bills and supporting a family with the previous minimum wage. This causes the labor market to lose jobs, at a price of 15 dollars firms will demand less employees. The problem in New York is workers will love to earn a higher wage, but the downfall is increases in unemployment. Let’s say the market is in equilibrium demanding 150 jobs. If the minimum wage is increased the amount of jobs demanded will be less at 120 jobs. However at this point there are 200 workers willing to work, but only 120 jobs. In this case the quantity of labor demanded goes down while the quantity labor supplied goes up. Since there is 200 workers looking for jobs, but firms only higher 120. That means there is a surplus of 80 workers. The surplus is unemployment. This thus causes firms to choose whether they will decrease the amount of labor higher or increase the prices of consumer

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