Labor Market and Minimum Wage Essay Example | Topics and Well Written Essays - 500 words

Labor Market and Minimum Wage - Essay Example ns for their youth the disemployment effects are smaller, and in countries where labor market is regulated the minimum wage standards have the least impact on disemployment (Neumark & Wascher, 2003). Labor demand in the present era is determined by the rapid changes in technology which have placed more emphasis on increasing productivity by dependence on computerization and software rather than the human workforce. This might present an inference that the average labor requirement will decrease as the industries become increasingly technology driven. However this is not true as the change will only be in the quality and not the quantum of workforce, as human input will be needed to run such technologies. Any increase in minimum wage usually affects the employment pattern of a country in a negative manner. The most affected are the younger workforce who usually work on much less wages and therefore become unemployed. The usual analysis of the effects of fixing a minimum wage were usually done by using a ‘time-series’ method where the impacts were studied over a specific period. However the approach misses on some aspects like the relation of data to other contributing factors such as recession and other labor market policies. A cross sectional data analysis approach was therefore preferable to arrive at a more pertinent and accurate conclusion ((Neumark & Wascher, 2003). The authors’ analysis suggested that other factors contributed much more towards unemployment rather than the fixing of a higher minimum wage alone. Recession was cited as one of the prime factors affecting employment patterns. Any increase in the minimum wages makes employment seem more attractive than studies to those in late teens and thereby disturbs the equilibrium. However with the latest trend of changes in the labor market from traditional industries like production and manufacturing to more sophisticated ones like the service industry and those involving technical knowhow like