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Discussion: (4 comments)

  1. All good, and underappreciated points. I’d also add Scott Winship’s “wage correction” argument to this list. Even if average wage productivity did increase faster than average total compensation, this could be seen as a correction to the heavily-unionized period when wage growth outpaced productivity.

  2. Seattle Sam

    There is really no good economic argument for the minimum wage or any other price floor. It is merely a political one. If Democrats and Unions opposed minimum wages, the NY Times would turn on a dime.
    The effect of the minimum wage on an individual depends on what his labor value is. If you are someone whose labor value is greater than the $10/hour, then a boost in the MW from $7 to $10 may actually help you because it eliminates competition from those whose value might be only $8.
    On the other hand, if your labor value is only $8, the rise in the MW will price you out of the market.
    The great hypocrisy is that the Times and other MW supporters purport to favor MWs in order to help the least skilled — i.e. those who are priced out of a job.

  3. What is the Neumark and Wascher response to the Doucouliagos and Stanley Trimmed Funnel Graph which essentially says that the minimum wage has “an insignificant employment effect (both practically and statistically).”

  4. The problem it appears is tying wages to productivity. Wages are simply determined by supply and demand. There’s no steadfast rule that says highly-skilled work pays more than low-skilled work but it usually does because there are fewer highly-skilled workers whereas low-skilled workers are common. However if there was a sudden drop in the worker population then the wages for low-skilled work can become surprisingly high. Hence from the employers’ perspective they want strong immigration and/or a high birth-rate.

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