Study on the Effectiveness of Minimum Wage and the Necessity of Abolishment by Countries

DOI

10.2991/assehr.k.220110.029How to use a DOI?

Keywords

Minimum wage; Germany minimum wage reform; Efficiency; Equity; Policy

Abstract

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.

Copyright

© 2022 The Authors. Published by Atlantis Press SARL.

Open Access

This is an open access article under the CC BY-NC license.

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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  -