Today, we will look at the vast amount of data and see what conclusions we can draw from them, first looking at more seemingly partisan data on the Right and Left and working up from there (see my previous posts on Rights-based arguments and the importance of empiricism in economics).
This is one of the meta-analyses of Neumark and Wascher (the economists most cited in opposition to the minimum wage increases). On page 115 we find the great line: “What is likely most striking to the reader who has managed to wade through our lengthy review is the wide range of estimates of the effects of the minimum wage on employment, especially when compared to the review by Brown et al. in 1982.” That’s for sure. Continue reading →
Yesterday, I posted my first piece on this series exploring the minimum wage and demonstrating why utilitarian arguments are so powerful. Today, I will delve into the utilitarian idea surrounding the minimum wage, and consequently an economic analysis of this policy. Economic theory is an excellent way to understand the consequentialist impacts of a policy in marketplace, but this post will also cover the limitations of theory vs data (for the data analysis, see my subsequent post).
The Economics of the Minimum Wage
Economics allows us to understand how market actors and institutions impact the distribution and exchange of resources. Continue reading →
The minimum wage debate has reentered the political stage with special promotion by President Obama, starting with his State of the Union Address this past January. The political huffing and moral rhetoric surrounding the topic may give the impression that it is a straightforward issue; on one side are the corporate employers who are watching out only for their bottom lines and their profit margins, while on the other stand the working poor who could use a helping hand from legislators.
As is often the case in politics, the actual issues at hand are far more complex and interesting than the rhetoric would have you believe, and I think debate about the minimum wage misses not only a great deal of understanding of the other side, but also a great deal of research done on this topic. This series of posts (next and final posts) will construct a thorough picture of the motivations behind the minimum wage through an analysis of both the politics surrounding the minimum wage as well as the extensive economic research done in the past 20 years. Continue reading →