how does the marginal product of labor change as more workers are hired
Marginal product of labor There is a factory which produces toys. When there are no workers in the factory, no toys are produced. When there is one worker in the factory, six toys are produced per hour. When there are two workers in the factory, eleven toys are produced per hour. There is a marginal product of labor of five when there are two workers in the factory compared to one. When the marginal product of labor is increasing, this is called increasing marginal returns. However, as the number of workers increases, the marginal product of labor may not increase indefinitely. When not scaled properly, the marginal product of labor may go down when the number of employees goes up, creating a situation known as diminishing marginal returns. When the marginal product of labor becomes negative, it is known as negative marginal returns.
History of the minimum wage After a study of the minimum wage laws in Australia and New Zealand The Liberal Party acted to set up a minimum wage in the most heavily sweated or underpaid industries, as part of a broad range of social reforms. Winston Churchill, president of the Board of Trade, introduced the Trade Boards Act in 1909. It created boards that set minimum wage criteria that were legally enforceable. The main provision was to set minimum wages in certain trades with the history of low wages, because of surplus of available workers, the presence of women workers, or the lack of skills. At first it applied to four industries: chain-making, ready-made dresses. paper-box making, and the machine-made lace and finishing trade. About 70 per cent of their 200,000 workers were women.[7]