Topoi

I am currently in the process of brainstorming for an upcoming research paper. I am essentially going to consider the Idea of lowering minimum wage in order to lower the unemployment rate. The current minimum wage does not equilibrate the supply and demand for labor, there is more supply for labor than there is demand. Hence, we have the greatest unemployment rate we have had in 25 years, 8.1%. If the minimum wage were to be lowered, than the demand for labor would go up and the wage would better equilibrate the supply and demand for labor. As a result, firms would be able to hire more labor, and the employment rate would rise. From a pragmatic standpoint this makes total sense. However, from an ethical and moral standpoint some issues rise because for several years this would have a negative effect on most of the people currently making minimum wage. After a few years, as the minimum wage decreases so would the overall price level. Although, Changes in the price level lag and are not instantaneous with changes in minimum wage. Due to this lag for a while employees would be making a lower minimum wage, but still face the same cost of living. In the short run lowering minimum wage is not ethically fair, but in a pragmatic longterm sense the country would be in a better place in 20 years or so.