Note: This is post #27 in a weekly video series on basic microeconomics.
Minimum wages are a type of price floor, and as with all prices floors, when prices are kept artificially high they can lead to several consequences that hurt the consumer. In this video by Marginal Revolution University, Alex Tabarrok shows how price floors create surpluses (such as a surplus in labor, or unemployment) as well as deadweight loss.
(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)
Previous in series: What you should know about rent controls