There’s another thread where this has been mentioned a few times, but I want to make a dedicated thread about it.
I’d like to know what the empirical evidence says concerning the effects of minimum wages.
By emphasizing “empirical evidence” what I mean to request is that you don’t present me with an armchair analysis, telling me what you figure is a natural or obvious implication of a minimum wage. I want to know what actual measurements have actually been taken which represent the difference made by a minimum wage in the actual world.
Thanks in advance…
I put this in GD because though it’s kind of a GQ-ish question, I anticipate… conflict…
The most interesting thing about the establishment of the minimum wage, and about every time it has been increased: it did not lead to an increase in unemployment. Many people had predicted that unemployment would follow, and backed this up by standard supply-and-demand curves from basic economics. But the facts are, it doesn’t have that effect. It also doesn’t seem to lead to significant inflation.
Here is the Card/Krueger paper that was the first to buck conventional wisdom (that minimum wage increases negatively affected employment). After Card and Krueger, there were lots and lots of rebuttals that showed the expected effect, but analyses of them have allegedly suffered from “publication bias” (according to Card and Krueger, anyway).
If there’s a conclusion to be drawn, it’s that minimum wage increases have no (or insignificant) negative effects when the equilibrium point for unskilled labor is close to the minimum. Think of it like the Laffer Curve.
Yeah, but where did you point out that minimum wage increases have no (or insignificant) negative effects when the equilibrium point for unskilled labor is close to the minimum?? Can you tell me THAT???
BTW, what you are describing is sort of like a Laffer Curve…
I didn’t read the paper because it’s taking forever to load on my computer but can you explain what you mean by equilibrium point? It sounds like you are saying that a small increase in minimum wage has no effect when the wage is close to where it would be if determined strictly by market effects. This seems like common sense. The real question is the effect of so-called “living wages” in some cities that inflate the minimum wage significantly above the federal minimum. Am I misunderstanding you?
Not really. You made some vague reference to something completely unrelated to the MW. This is a highly contested subject, and it would behoove the debater to be clear on what he is saying.
It would also behoove debaters to think about what is being said before commenting upon it. If you did not know what the Laffler curve was, it would behoove you to look it up rather than accuse the debater of being disingenuous.
And that’s just dealing with your first point, even though you quoted his response to your second point, in which he did very clearly state that the study he was referencing was not the latest one on the subject.
I really do want to learn about the subject at hand, as I know little. It would be really good if people on both sides would try for a debate instead of the usual useless arguing. This goes for both of you.
That’s exactly what it means. The non-common-sense part is that Card/Krueger found a positive correlation between the MW and employment in their original study. They came up with a number of theories to explain how that was possible, but I’m neither a statistician nor an economist so I can’t say if they hold water.
[QUOTE=John Mace]
Not really. You made some vague reference to something completely unrelated to the MW. This is a highly contested subject, and it would behoove the debater to be clear on what he is saying.
[/QUOTE]
I doubt you’ll find any evidence that shows a strong relationship between minimum wage increases and any other economic effect. The amount of money involved and the number of jobs affected is just noise compared to the rest of the economy.
This seems to argue against having a minimum wage at all. A small increase in MW over the “organic” minimum seems to suggest that market forces are sufficient to determine what wages should be. The argument for the MW always hinges on the possibility that businesses will pay workers pennies per hour because they can.
Best post up to that point in the thread. I’m dubious of the OP, because you’re basically saying “I don’t wanna type in a few search terms to get a collection of different academic studies on the minimum wage in the United States, do it for meeee!!” I don’t play that game, but if I did, the articles you’d find mostly show very weak effects from changes in the Federal minimum wage. The OP doesn’t want “armchair analysis” so I won’t go much further than that, but it takes less than an hour to find and read 3-4 studies like you’re looking for and they all basically fall into a few camps. It’s not an overly complicated issue in economics, just not one that is well understood because there are tons of variables (ex: many States are never effected by Federal minimum wage increases, the workforce earning the Federal minimum at times of increase is usually small etc.) and it’s never been important enough to focus the kind of money and time needed for more rigorous and systemic study. That just means no one has a definitive model for how they impact the economy, but we do know it doesn’t impact the economy much.