Q. Does an increase in minimum wage result in a higher unemployment rate?
Issues and Background
In response to the great depression of 1920s, minimum wage laws were introduced. As the economy was suffering from a big set back characterized by falling prices, falling output and falling employment, NIRA, National Industrial Recovery Act (1993) was introduced in an attempt to curtail this downturn, encouraging the trade associations to formulate agreements of minimum wages and establishes price floors. The participating firms used to display a “blue eagle” logo. But just after two years the Supreme Court Ruled NIRA as unconstitutional and all agreements made under this act were terminated. After three years in