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Labor Economics

Indeed, labor is the most essential element of production. In economics, there are lenses or strategies that an individual can employ to analyze mobility of the factors of production, such as labor, even in international trade. In the United States of America and Canada, citizens have a strong attachment to the determination of minimum wages. In this paper, determination of the minimum wage of $10.25 in Ontario as well as the reasons and the purposes of setting exactly this sum as a minimum wage are discussed. It also covers such relative aspects as determination of tax, social security costs, and estimated expenditure of an individual.

It is worth noting that the minimum wage of $10.25 is essential because it enables individuals to earn a living. This so because, despite the fact that the amount is high for some people and low for others, it plays a crucial role from a theoretical view as people argue that it has a close relationship with immigration to the area. They claim that since some individuals migrated to the area illegally, they are willing to take jobs that pay small amounts of wages. Therefore, setting a minimum wage level of $10.25 will help prevent individuals from taking low paying jobs.

The minimum wage of $10.25 enables us to understand that according to the public policy, this minimum wage level is based on the existence of illegal market jobs. This is a clear indication that there are certain jobs that pay its employees less than $10.25, which is illegal according to the labor market policies. Therefore, it is vital to set up a minimum wage standard to protect employees from underpayment. Thus, the paper aims at explaining the source of a minimum wage level of $10.25, investigating the reason for choosing $10.25, and giving an understanding of the labor market operation.


The economic theory used by a majority of economists states that as the price determination is estimated by interaction of demand and supply forces, it is essential to determine the minimum wages in the same way. For instance, there are factors that have a significant impact on demand for labor, because most people believe that demand for labor comes from derived demand. Economists believe that demand for labor is not a direct demand, but instead it results from demand for commodities and services. Economists, therefore, believe that if demand for commodities and services is high, demand for labor increases, leading to increase in the minimum wage above $10.25. On the other hand, if demand for labor is low due to low demand for services and commodities, the minimum wage level remains at $10.25. As a result, the minimum wage of $10.25 is caused by low demand for labor, elasticity of demand and supply, and the proportions of the total and labor costs.

For appropriate measurement of a minimum wage of $10.25, it was essential to conduct a study among individuals employed. In the study, adults and teenagers employed were asked questions. Out of 40,800 earning a minimum wage, 22,700 (that amounted to 55.6%) lived with family members. Out of the 22,700, 55.5% were of age between 15 and 24 years and were in colleges and universities. This is an indication that the minimum wage of $10.25 is of benefit to a majority of young people. During measurement of the $10.25 minimum wage level, it is evident that if the minimum wage increases by 10%, it will lead to a decrease in the number of young people employed from 6% to 3%. On the other hand, taking into consideration the employees earning between the old and the new minimum wages, this will mean that lose of employment will increase from 4.5% to 20%. In this measurement, it is evident that the minimum wage level will help eliminate a majority of the low skilled workers.

In Canada, most people believe that a minimum wage level of $10.25 is high. As a result, it is capable of eliminating the low skilled employees from the workforce. In addition, it has the greatest potential to eliminate the young individuals from the workforce and to encourage the lucky individuals to gain experience and get promotions. In Canada, estimates state that a minimum wage of $10.25 will lead to lose of jobs by individuals of age between 15 and 24. In addition, those who will lose the job will range from 9,391 to 41,738. The idea of setting a minimum wage of $10.25 is noble and at the same time unfortunate, because it is much political rather than it is economical. The minimum wage of $10.25 will lead to unemployment of a majority and employment of only few individuals.

Bearing in mind that a minimum wage of $10.25 is much political than it is economical, it is evident that there are attempts to incorporate it in the public policy. In addition, due to the incorporation into the public policy, up to 41,000 individuals will lose jobs. Moreover, the government may appear discriminative with their minimum wage policy of $10.25, because it eliminates a majority.

Indeed, the model used to determine the minimum wage level of $10.25 has significant relevance to the underlying model of labor economics. In addition, it explains the significance of studying labor economics, because through the study of labor economics, individuals will understand the happenings in the labor market. Furthermore, individuals will explain the cause of unemployment and come up with a judgment on whether the act is fair or biased.


Individuals conversant with labor economics will understand the meaning of a minimum wage level of $10.25. In addition, such individuals are the only ones who will understand the impacts of a minimum wage of $10.25. As a result, individuals conversant with labor economics will explain such impacts to affected individuals. Finally, the idea to set a minimum wage of $10.25 has associated positive and negative impacts on the affected parties. Thus, there should be attempts to curb the negative impacts resulting from the minimum wage level of $10.25.

Susumi Ishii Maritime Transport
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