Analysis of Microeconomics

Term Paper # 104114

Economics
Economics > Micro

An overview of the US economy through the analysis of microeconomics.

2,636 words () | 11 sources | MLA | 2008 United States

Paper Summary:

This paper discusses different elements of microeconomics that contribute to the overall economy in the U.S. The author of the paper cites research that has been carried out on minimum wage issues and describes how the downturn of the housing market impacts on other sectors of the economy.

Outline:
Minimum Wages
Antitrust Laws
The Housing Industry & Employment

From the Paper:

"Economic theory itself tends to undermine the argument that minimum wages are somehow beneficial. Economic theory states that if the price of unskilled labor increases then employers are just as certain to seek alternative labor sources that are less expensive (Wolfson & Belman). In practice, this theory plays out by managers who, when faced with increasing labor costs, refrain from hiring the 3 employees they might have hired were it not for the increased cost of labor and instead only hire two more skilled laborers but still at an overall savings. This point is made exceedingly clear in Solomon's article where she observes that: "At Petite Provence eatery in Portland, co-owner Didier Blanc says the minimum wage...has had an 'aftershock effect' forcing him to raise wages for all employees...the costs are passed on to customers"(par.13). Alternatively, these managers or companies may seek to invest in the automation necessary to ensure that the manual labor is no longer necessary or to off-shore the work entirely to less expensive markets. In that sense, elevating the federal minimum wage does in fact manifest a positive influence on productivity and output because industry is inclined to automate and become more efficient across the board which is good. However, while the minimum wage increase in Portland can be viewed as a positive argument for raising the federal minimum wage, it also indicates that the benefit to the low-wage workers most impacted will be short-lived:"

Sample of Sources Used:

Aversa, J. "Unemployment Claims Rising Faster." Chicago Tribune (AP), November(2006).
Brown, S. A. "Antitrust Violations." American Criminal Law Review, 43/2(2006): 217+.
"EU Antitrust Laws Didn't Alter Vista, Gates Says." The Wall Street Journal, Nov/9(2006).
Fairris, D., & Pedace, R. "The Impact of Minimum Wages on Job Training: An Empirical Exploration with Establishment Data." Southern Economic Journal, 70/3(2004): 566+.
Haugen, S. E. "Characteristics of Minimum Wage Workers in 2002." Monthly Labor Review, 126/9(2003): 37+.