The Pros And Cons Of A Laissez-Faire Economy

In order to keep the economy from fluctuating too far from equilibrium, the federal government sets price floors on goods and services. This tool known as a price floor initializes a minimum wage at which laborers can sell their labor to employers. Typically, the minimum wage depends on rising or falling productivity. It also reflects the inflation rates and the average income needed to reach the standard of living. Standard of living is thought to be improved with a minimum salary; making the average level of comfort and self- sufficiency easily obtainable. With a price floor on salary, equality and fairness in the work place is much more common. Workers in the same wage range don’t have to combat unfair working conditions because they
Throughout the nineteenth century the idea that the capitalistic government should not have much say in business was spread over Europe and the United States. Instead it was was thought that the economy had natural order and would keep itself at equilibrium without federal intervention on prices and wages. History shows this strategy made the economy more efficient in terms of how money was spent towards peoples own self- interests. Fast forward to the twentieth century when the more liberal ideas about business and state separation spread, acts and laws enforced by the state set standards for workers and employers. 1938 was the initiation of the Fair Labor Standards Act that created a wage floor at $0.25 per hour. Getting paid overtime was now a law as well. Then in the early 2010’s, almost four and a half million employed persons were paid the national minimum wage (which was obviously raised over the years to $7.25) While this sounds like a large number of people, keep in mind that unemployment was at its highest in 2010 since before 1990. Therefore, there is a direct correlation between increased unemployment and heightened minimum