Week 13: EWOT

Getting paid minimum wage usually sucks.  However, if you live in San Francisco, it shouldn’t seem like much of a bad prospect anymore; city officials, based on a 2003 law which increases minimum wage with inflation, have raised the minimum wage to $10.24 per hour starting on January 1, 2012.  Although this is doing a lot to help the large working population of San Francisco, many of whom live within the city, it must, according to what we learned in class this week about price floors, affect the labor market.  The price floor has arguably affected San Francisco’s economy, for despite a progressive and growing economy, San Francisco has kept an unemployment level of around 9% in the past three years.  This is undoubtedly due to the economic principle addressed in class on Friday, in which a price floor on wages will create a surplus of workers (or in layman’s terms, higher unemployment).  If San Francisco wants to help lower unemployment more, it is logical that they should freeze the minimum wage increases, for the incentive for working in San Francisco due to the high minimum wage can only increase the supply of labor in San Francisco.