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Minimum Wage Increase in a Competitive Economy

Author

Listed:
  • Burghelea Cristina

    (Hyperion University of Bucharest, Romania)

  • Bãlan Mariana

    (Institute for Economic Forecasting-NIER, Romanian Academy)

  • Vuþã Mariana

    (The Bucharest Academy of Economic Studies, Romania)

Abstract

Administrative prices, lower or upper price limit imposed by the state has consequences for employees and employers: an increase in the minimum wage is lower and is below the price of the offer is irrelevant to this situation, the emergence of rising inflation imposed minimum wage increase, so all employers would like to increase selling prices of products not to fail, directly generating involuntary unemployment imposed minimum wage increase, employers can not raise prices because they compete directly with other existing companies market efficiency activities will be reduced, it will go bankrupt and employees will no longer have a job. Article demonstrates the importance of the minimum wage in a distorted economy and the way it contributes to competitive economic growth.

Suggested Citation

  • Burghelea Cristina & Bãlan Mariana & Vuþã Mariana, 2014. "Minimum Wage Increase in a Competitive Economy," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 144-148, May.
    • Handle: RePEc:ovi:oviste:v:xiv:y:2014:i:2:p:144-148
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    More about this item

    Keywords

    labor market; minim wage; economic growth; competitiveness.;
    All these keywords.

    JEL classification:

    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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