can someone explain in laymans terms why it increases unemplyment – it is b/c demand shoots up, everyone wants a job b/c of this price floor ??
Price floor. Employers can’t pay a wage this high for someone to sweep the floor in the firm. So now they make the back office employees sweep the floor hence keeping groundskeeper Willy out of a job. True Story.
http://en.wikipedia.org/wiki/Image:Price_floor_eqm.png Min. wage is the price floor. At the price floor there are more labour supplied (red curve) than demanded (blue curve) by the factories. Thus the gap between the two dots are the unemployment number.
KJH Wrote: ------------------------------------------------------- > Price floor. Employers can’t pay a wage this high > for someone to sweep the floor in the firm. So > now they make the back office employees sweep the > floor hence keeping groundskeeper Willy out of a > job. > > True Story. amzing example, i will never forget it now. THANK YOU