Essays /

Government Price Controls Topic Essay

Essay preview

1. There are federal and state laws setting minimum wages1 for workers. There are also city laws setting price ceilings for housing rents2.

a. Why are there laws setting minimum wages for workers and maximum rents for housing?

Minimum wage laws were created in order to provide unskilled employees with a living wage. The laws were intended to reduce poverty, and increase the standards of living for workers. It places a limit on the minimum that employers are legally allowed to pay workers.

Rent control laws are set to place an upper limit on the amount that can be charged for a unit. The landlords are only allowed to charge the tenant up to a certain amount which is intended to eliminate the possibility of landlords exploiting their tenants by charging excessive rents and to create a fair market.

b. Why are there no laws setting maximum wages for workers or minimum rents for housing?

Imposing maximum wage limits would be detrimental to innovation, and limit motivation among employees. Furthermore, it would be devastating to the economy potentially putting a number of companies out of business. Those who earn high salaries are enabled to purchase high-end luxury items such as Rolex watches, Porsche automobiles, Multi-million dollar estates, etc. To place a limit on the earning potential for employees would decrease their purchasing power and reduce their spending on luxury items. In turn this could result in businesses closing, loss of jobs, reduced taxes paid into our government, and over...

Read more


000 1 100 100/hr 100/month 2 2013 208 3 4 40 52 63 8 abil addit address advantag advers affect afford allow also although among amount annual answer apart automobil avail b back behind benefici benefit beyond budget build busi c call caus ceil certain chanc charg cheaper cheapli citi clear close compani complet conclud consum continu control cope cost could countri crash creat cut d decreas demand design detriment devast develop disadvantag discontinu dispos dollar drastic due dwell e earn econom economi effect elimin employ employe enabl end estat etc everi exampl exceed excess expens experi exploit fair famili feder feel fewer find fire first fix floor forc form furthermor general good govern harm help high high-end higher hike hire home hour hous howev idea illeg immigr impact impos inabl incom increas individu infring innov intend interfer invest item job justifi labor lack landlord law leav legal less level limit live livingston longer lose loss low low-incom low-skil luxuri machin maintain mainten market maximum may meant mechan million minimum minor modest month mortgag motiv multi multi-million must near negat new number occur offset opportun order output outrag outsourc overal p p.62 p.66 paid pay per place porsch possibl potenti poverti power pre pre-tax previous price produc product profit properti protect provid purchas put quantiti question rate realiti realiz reduc regul remain rent rent-control rental rents2 replac repres result retain right rise rolex salari search servic set shortag skill skills/productivity small spend standard state substitut suppli surplus tax tenant tend theori therefor thus topic train tremend trickl turn turnov typic unabl unemploy unit unskil upper via view wage wages1 watch way week well well-intend whole within without work worker worth would year