India’s current minimum wage translates to an income of ₹4,400 per month, which cannot raise a family of four out of poverty. The knee-jerk reaction to minimum wages of the pro-market school is that it leads to rationing and shortages. Their reaction was to the first ever minimum wage legislation of 1938, ushered in by US President F.D. The extra cost of paying a higher minimum wage is passed on to the consumer. The empirically confirmed fact is that minimum wages are mostly paid to unskilled workers who work in non-tradable sectors.

Source: Mint March 22, 2021 17:05 UTC