ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Minimum wage is an example of a price control technique. Q. An example of price floors is the minimum wage law in the labour market, where government, in order to protect the suppliers and interests of laborers, mandates a wage floor or minimum wage.

Detailed explanation-2: -Minimum wage is an example of a price floor as the wage or the price of labour cannot go below this level.

Detailed explanation-3: -Minimum wages have been defined as the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract.

Detailed explanation-4: -Provided further that where, in fixing the minimum rates of wages of any employment under sub-clause (1) or sub-clause (ii), any class of employees is left out, the State Government may, at any time fix the minimum rates of wages payable to such class of employees.

Detailed explanation-5: -The theory states that wages that are provided to a labourer should be a payment that is just sufficient to satisfy the necessities of life. It determines that there is a subsistence level of payment which should be followed and the wages should be given according to the same, without exceeding such limit.