Which minimum wage level is preferred more by the employers? The minimum wage level above the equilibrium wage, or below the equilibrium wage, or at the equilibrium wage?

Answer 1

Employers typically prefer a minimum wage level below the equilibrium wage. This is because when the minimum wage is set below the equilibrium wage, employers can still hire workers at a lower cost, leading to higher profits for the company. An increase in the minimum wage above the equilibrium wage may result in higher labor costs for the employer, potentially leading to layoffs or reduced hiring. On the other hand, setting the minimum wage at the equilibrium wage can help ensure fair pay for workers while still allowing employers to maintain their profit margins.