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By David Neumark

ISBN-10: 0262141027

ISBN-13: 9780262141024

ISBN-10: 1435691849

ISBN-13: 9781435691841

A entire evaluate of facts at the impact of minimal wages on employment, abilities, salary and source of revenue distributions, and longer-term hard work industry results concludes that the minimal salary isn't really a very good coverage software.

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Extra resources for Minimum Wages

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To work out and equate marginal costs and marginal returns for each productive factor’’ (75). As evidence, he pointed to a 1945 survey that he conducted of southern manufacturing firms, in which only 15 percent of respondents mentioned wages as a factor in determining the level of employment, which he argued ‘‘raises grave doubts as to the validity of conventional marginal theory and the assumptions on which it rests’’ (81). The History of the Minimum Wage in the United States 21 In the ensuing debate, both sides stood their ground.

Over time, researchers increasingly focused on this metric. The second study we highlight for its contribution to this literature is by Gramlich, who estimated minimum wage effects on a variety of outcomes, including employment and wages. However, the main contribution of this study, in our view, is that it pointed out that the employment effects of minimum wages, which were the focus of the bulk of the literature in existence at that time, are only part of the story. In particular, Gramlich wrote: ‘‘Minimum wages do, of course, distort relative prices, and hence compromise economic efficiency, but so do all other attempts to redistribute income through the tax and transfer system.

This conclusion soon came to be viewed as the ‘‘consensus’’ of economists on the effects of the minimum wage on employment. Indeed, in the wake of the comprehensive report of the Minimum Wage Study Commission (1981), researchers spent little of their time over the remainder of the 1980s on research related to the minimum wage. Perhaps their view was similar to our own academic advisers, who 32 Chapter 2 cautioned us against working in an area where nearly all of the interesting questions had been answered.

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Minimum Wages by David Neumark


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