I'm all out of faith
This is how I feel
I'm cold and I'm ashamed
Bound and broken on the floor
--Natalie Imbruglia
A price floor is a minimum price set by law. Trade at prices below the minimum is prohibited.
An example of a price floor is a minimum wage law. Currently, the US federal minimum wage is $7.25/hr although it is higher in some states.
Buyers of labor at prices below the legal minimum are prohibited from trading with people willing to sell their labor at rates less than $7.25.
For marginal workers, minimum wage laws constitute compulsory unemployment for people willing to work for less than the legal minimum.
For organizations, minimum wage laws drive employers to hire fewer people than they would otherwise. Moreover, employers are likely to search for alternative environments where labor markets are less restrained.
Price floors infringe on freedom of contract. Moreover, price floors set on any commodity result in a reduction in demand for that commodity.
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President Barack Obama, while campaigning in 2008, pledged to hike the minimum wage to $9.50 an hour and index it by the end of 2011, "to make sure that full-time workers can earn a living wage." Obama ultimately failed on that pledge.
~Huffington Post
President Barack Obama will put job creation at the centre of his second term agenda when he delivers his fifth state of the union address on Tuesday.
Mr Obama will stress the importance of manufacturing, saying he wants to make the US a “magnet for jobs and manufacturing."
~FT.com
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