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Evaluating Policy Responses to Declining Real Wages
Following a period of significant economic disruption, a country's government observes that while average worker salaries have been slowly increasing, the cost of living has risen much faster, leading to a sharp drop in the purchasing power of households. A policymaker proposes a nationwide 10% increase in the minimum wage to address this issue. Evaluate the potential effectiveness and possible unintended consequences of this policy in restoring workers' purchasing power.
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Ch.1 The supply side of the macroeconomy: Unemployment and real wages - The Economy 2.0 Macroeconomics @ CORE Econ
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Evaluating Policy Responses to Declining Real Wages