Minimum wages create unemployment in markets where they create a
A)shortage of labor.Minimum wage laws are not the predominant reason for unemployment in the U.S.
B)shortage of labor.Minimum wage laws are the predominant reason for unemployment in the U.S.
C)surplus of labor.Minimum wage laws are not the predominant reason for unemployment in the U.S.
D)surplus of labor.Minimum wage laws are the predominant reason for unemployment in the U.S.

Question

Quizplus · Accepted Answer

Minimum wage laws create a surplus of labor in markets where they are implemented because they set a price floor above the equilibrium wage rate, meaning that there are more job seekers than available jobs at that wage rate. This results in some individuals being unable to find employment, and therefore experiencing unemployment. However, minimum wage laws are not the predominant reason for unemployment in the U.S., as there are many other factors that contribute to overall employment levels.

Minimum Wages Create Unemployment in Markets Where They Create a