The most important part of the new minimum wage research

As a consequence, there is no relationship between the employment
estimate and the Kaitz index up to around 59 percent, confirming that minimum wage
changes in the U.S. we study have yet to reach a level above which significant disemployment
effects emerge.

Which is around what I’ve been saying all this past decade…..

12 thoughts on “The most important part of the new minimum wage research”

  1. The US has spent the last few years in mild economic expansion (is that right?). I’d guess that minimum wages would do most damage during an attempt to recover from recession.

    People would find it harder to get new jobs than would otherwise be the case because the price of labour at the bottom of the market would have been driven upwards. But then such people are deplorable so what do they matter?

  2. Economists: If you make employing workers more expensive by forcing employers to pay them more than the market rate, it doesn’t effect employment rates.

    Also economists: If you make employing workers more expensive by taxing the employers for hiring, it does effect employment rates.

  3. Around here, federal min. wage is irrelevant. Employers pay more. Cause they have to to get people to work for them.

  4. Sounds like a good case to devolve setting the minimum wage to local authorities – because the median in Hartlepool is different to the median In Oxford.
    Levels of disability, ex-cons and the young without skills and old with waning skills but still wanting an income differ too.
    Should definitely start with devolving this to Sco, NI and Wal. We’d soon find out how keen the SNP were on the union – oh, we state publicly that we’d like that power to set a different number, but actually on second thoughts we’d rather not have it. Please keep quiet about this like you did with APT.

  5. The better plan is to evolve out of minimum wages all together. What employers pay is none of the government’s business.

  6. Bongo,

    “Sounds like a good case to devolve setting the minimum wage to local authorities – because the median in Hartlepool is different to the median In Oxford.
    Levels of disability, ex-cons and the young without skills and old with waning skills but still wanting an income differ too.”

    At which point, no, don’t devolve, scrap it. You’ve already pointed out some complexity and if you start looking, you’ll see even more. Should I get paid for the website I’m building for a charity for free? Why is that OK, but it’s illegal if the charity pays me £1/hr?

  7. I agree with your desires BoM4, but it should be up to local authorities to scrap it if they want to. I’d vote to scrap, but the politics wouldn’t play that way.
    And think of the delicious possibilities.

  8. Tim: thanks for the clear explanation. The question I have is about the geographical diversity of the US. $15/hr may be OK in San Francisco or New York. But I live in flyover country. There are enormous rural areas within a couple of hours of driving from my house where $15/hr is not the best hourly job in town. A $15/hr minimum will wreck those places.

  9. Yep, such areas are screwed. Bureau of Labor Statistics has a page somewhere of median wage by metropolitan area. There are several in CA where it’s well under $15 an hour. Inland Empire, Central Valley sorta places. They’re going to be entirely shafted by the state minimum wage rise. Precisely because wages do vary over geography. It’s a point I’ve made many a time.

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