Why is minimum wage legislation adopted by the government.

1.	Why is minimum wage legislation adopted by the government.
Answer» <html><body><p><br/></p>Solution :Government fixes minimum wages of labour above the equilibrium <a href="https://interviewquestions.tuteehub.com/tag/rate-1177476" style="font-weight:bold;" target="_blank" title="Click to know more about RATE">RATE</a> of wages which is determined by the free interaction between demand and supply forces. It is done with a view to <a href="https://interviewquestions.tuteehub.com/tag/protect-1170661" style="font-weight:bold;" target="_blank" title="Click to know more about PROTECT">PROTECT</a> the interest of labour, since they do not have strong bargaining power. Therefore, government fixes minimum wage rate at a <a href="https://interviewquestions.tuteehub.com/tag/level-1072714" style="font-weight:bold;" target="_blank" title="Click to know more about LEVEL">LEVEL</a> higher than equilibrium level of wage rate. Minimum wage legislation is undertaken to ensure that wages paid to <a href="https://interviewquestions.tuteehub.com/tag/workers-1459855" style="font-weight:bold;" target="_blank" title="Click to know more about WORKERS">WORKERS</a> do not <a href="https://interviewquestions.tuteehub.com/tag/fall-983217" style="font-weight:bold;" target="_blank" title="Click to know more about FALL">FALL</a> beyond a certain level. Hence in the labour market, a floor is set on wages i.e., wages are not allowed to fall beyond a certain level.</body></html>

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