Essay Example on Mill’s utilitarian theory of justice advocates for promotion of Goodness

According to the theory minimum wage policies are put in place to ensure individuals maintain quality of life Minimum wage laws seek for economic equality where companies are forced to pay individuals equal regardless of sex race among other features This theory argue that minimum wage forces companies to lay off some workers to cut labor expenses which in turn puts those employees in poverty trap Economic theory argues that minimum wage ensure unskilled workers are compensated for their services Minimum wage laws do not benefit long term or skilled employees However it forces the high paid employees to demand for increased wages as the companies increase the wage for low paid employees to minimum wage level According to economic theory employees are paid based on their skills rather than having dependants or not Minimum wage increases the cost of doing business and this force firms to raise the prices of their products to accommodate the extra expense of paying a higher wage Leonard 2000 The demand for labor is also reduced Minimum wage should consider market equilibrium wage to be effective and useful This helps in maintaining the overall employment Marginal revenue productivity theory of wages is a neoclassical economic theory which argues that the level of wages paid is equivalent to the marginal revenue product of labor Firms are after making profit and they therefore ensure the payments done for factors of production balance with marginal productivity Workers are hired up to the point when the wage rate equilibrates with marginal revenue product Minimum wage allows the firms to ensure they operate in a perfect competitive market Marginal productivity theory argues that wage rate is determined by interaction of demand and supply