Card 6 / 53: *How can minimum wage laws reduce the long-run demand (not just short-run quantity demanded) for labor?
Answer:
Business owners may respond to a minimum wage law by buying more machines and redesigning their workplaces to operate with a fewer number of higher-skilled employees. Once businesses have adapted in this fashion, the demand curve for labor will have shifted to the left, because even at the original wage level, businesses would now demand a lower quantity.
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Dr.Robert MurphyAssociated Scholar
Mises Institute
USA
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