In a 1973 Paper Entitled "A Living Wage," Published in Annals

question 167

Essay

In a 1973 paper entitled "A Living Wage," published in Annals of the American Academy of Political and Social Science (vol.409: 33-41),Daniel R.Fusfeld from the Department of Economics at the University of Michigan makes the following statement:

The only effective way to eliminate poverty in the United States is to pay all workers a living wage.As long as working people labor in jobs in which earnings are inadequate to meet even the poverty standards of income,their families will remain poor; furthermore,their poverty will be reproduced from one generation to the next.Our society will continue to suffer from all of the ills associated with poverty: disease,degradation,crime,hostility and anger.

This essay is a normative assessment of the living (or minimum)wage.In your short-answer essay,include the following elements:
a.What is the purpose of a living wage?
b.Compare and contrast the effects of a living-wage policy set in a labor market where the demand for workers is relatively price inelastic and one where it is relatively price elastic.Graph and explain your results.

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