Economic Analysis Of The Minimum Wage And The Enlightenment

Minimum wage is a policy which has an important impact on labor market in Western Countries. In this article, we try to answer two questions related to it. One is why minimum wage has such an impact on labor market and another is how we can use minimum wage policy to promote economic development. Although it has not been a long time since the implementation of minimum wage in China, through the research of minimum wage in western countries, we can learn that the setting of minimum wage should be paid attention to since it is influenced by interest group and results in a income redistribution, besides, policy maker should be careful with the minimum wage since it is a double-edged sword. On one hand, it has little positive effect of poverty-improving but on the other hand, it may contribute to promote market competition, industrial upgrade and human capital investment.