Richard Lester's Institutional‐Industrial Relations Model of Labor Markets and the Near‐Zero Minimum Wage Employment Effect: The Model Card and Krueger Ignored but Shouldn't Have

2020 ◽  
Vol 54 (4) ◽  
pp. 1002-1032
Author(s):  
Bruce E. Kaufman
Keyword(s):  
Labor Markets ◽  
Minimum Wage ◽  
Industrial Relations ◽  
Employment Effect ◽  
Wage Employment

Reply to “Credible Research Designs for Minimum Wage Studies”

ILR Review ◽  
2017 ◽  
Vol 70 (3) ◽  
pp. 593-609 ◽  
Author(s):  
David Neumark ◽  
William Wascher
Keyword(s):  
Panel Data ◽  
Labor Markets ◽  
Minimum Wage ◽  
State Level ◽  
Minimum Wages ◽  
Negative Effects ◽  
Employment Effects ◽  
Research Designs ◽  
Wage Employment

The authors make three points in this reply to the article by Allegretto, Dube, Reich, and Zipperer (ADRZ 2017). First, ADRZ shed no new light on the sensitivity of estimated minimum wage employment effects to the treatment of trends in state-level panel data, and they make some arguments in this context that are misleading or simply wrong. Second, the key issue ADRZ emphasize—using “close controls” to account for shocks that are correlated with minimum wage changes—does not generate large differences in findings, and ADRZ do not address evidence from Neumark, Salas, and Wascher (NSW 2014a) that questions the validity of the close controls used in Allegretto, Dube, and Reich’s (ADR 2011) and Dube, Lester, and Reich’s (DLR 2010) work. Third, ADRZ ignore or dismiss a growing number of studies that address in various ways the same issue of potential correlations between minimum wages and shocks to low-skill labor markets that ADRZ argue generate spurious evidence of disemployment effects, yet often find rather large negative effects of minimum wages on low-skilled employment.

Scrutinising the argument for reducing penalty rates

2017 ◽  
Vol 59 (5) ◽  
pp. 652-669 ◽  
Author(s):  
Joseph McIvor ◽  
Raymond Markey
Keyword(s):  
Empirical Evidence ◽  
Minimum Wage ◽  
Direct Evidence ◽  
Industrial Relations ◽  
Employment Effect ◽  
Productivity Commission ◽  
The Relationship

The issue of weekend penalty rates has been an important area of contention in Australian industrial relations in recent times, with employers seeking reductions in penalty rates or their elimination altogether. In its recent review of Modern Awards, the Fair Work Commission decided to reduce Sunday penalty rates in a number of awards. The decision was in part informed by a recent review by the Productivity Commission, which had gone so far as to recommend that penalty rates on Sundays be made equivalent to Saturdays. In this article, we examine two of the main justifications for reductions in Sunday penalty rates. We begin by examining the question of whether Sundays are still ‘special’ in a sense likely to warrant penalty rates additional to those on a Saturday. We find that Sundays remain the least preferred day to work, are most valued by employees, and occupy a particular role in time shared with family. We also examine the key claim by the Productivity Commission – accepted by the Fair Work Commission – that a reduction in penalty rates would necessarily result in increased employment in the industries considered. We find that there is little direct empirical evidence for this, and that minimum wage studies have been largely unable to find a net employment effect. The relationship among wages, policy and unemployment is complex in a way that defies simple predictions. There is a need for more direct evidence of the effects of penalty rates on employment.

Minimum Wage Employment Effects and Labor Market Concentration

2019 ◽  
Author(s):  
José Azar ◽  
Emiliano Huet-Vaughn ◽  
Ioana Elena Marinescu ◽  
Bledi Taska ◽  
Till Von Wachter
Keyword(s):  
Labor Market ◽  
Minimum Wage ◽  
Market Concentration ◽  
Employment Effects ◽  
Wage Employment

scholarly journals The Effect of Minimum Wages on Low-Wage Jobs*

2019 ◽  
Vol 134 (3) ◽  
pp. 1405-1454 ◽  
Author(s):  
Doruk Cengiz ◽  
Arindrajit Dube ◽  
Attila Lindner ◽  
Ben Zipperer
Keyword(s):  
Minimum Wage ◽  
State Level ◽  
The United States ◽  
Minimum Wages ◽  
Wage Distribution ◽  
Employment Effect ◽  
Hourly Wage ◽  
Difference In Differences ◽  
Bottom Part ◽  
Demographic Groups

Abstract We estimate the effect of minimum wages on low-wage jobs using 138 prominent state-level minimum wage changes between 1979 and 2016 in the United States using a difference-in-differences approach. We first estimate the effect of the minimum wage increase on employment changes by wage bins throughout the hourly wage distribution. We then focus on the bottom part of the wage distribution and compare the number of excess jobs paying at or slightly above the new minimum wage to the missing jobs paying below it to infer the employment effect. We find that the overall number of low-wage jobs remained essentially unchanged over the five years following the increase. At the same time, the direct effect of the minimum wage on average earnings was amplified by modest wage spillovers at the bottom of the wage distribution. Our estimates by detailed demographic groups show that the lack of job loss is not explained by labor-labor substitution at the bottom of the wage distribution. We also find no evidence of disemployment when we consider higher levels of minimum wages. However, we do find some evidence of reduced employment in tradeable sectors. We also show how decomposing the overall employment effect by wage bins allows a transparent way of assessing the plausibility of estimates.

Challenges posed by the EU minimum wage initiative to the ETUC and European trade union cooperation

2020 ◽  
Vol 26 (3) ◽  
pp. 325-343 ◽  
Author(s):  
Kristina Lovén Seldén
Keyword(s):  
Minimum Wage ◽  
Trade Union ◽  
Industrial Relations ◽  
Recent Developments ◽  
Institutional Differences ◽  
European Trade ◽  
Institutional Contexts ◽  
The Government ◽  
Role Of The Government ◽  
The Eu

This article addresses recent developments in the debate on a European minimum wage and tries to shed light on the Swedish standpoint, which from a European perspective might be difficult to comprehend. The article argues that even though the ETUC secretariat has tried to find a balance among the member organisations regarding the EU initiative on a fair minimum wage, it is far from enough from a Swedish and Nordic perspective. Issues such as how to approach collective bargaining, how to think about minimum wages and the role of the government in industrial relations cause problems when unions that operate in relatively diverse institutional contexts try to cooperate. It is therefore likely that the EU minimum wage will continue to be at the core of European trade union discussions in the coming years. At the same time, institutional differences between countries are not the only factors determining union cooperation in Europe. Contextual factors also matter.

scholarly journals Optimal minimum wage policy in competitive labor markets

2012 ◽  
Vol 96 (9-10) ◽  
pp. 739-749 ◽  
Author(s):  
David Lee ◽  
Emmanuel Saez
Keyword(s):  
Labor Markets ◽  
Minimum Wage ◽  
Wage Policy

Taking the Low Road: Minimum Wage Determination under Work Choices

2007 ◽  
Vol 49 (5) ◽  
pp. 741-756 ◽  
Author(s):  
Sally Cowling ◽  
William Mitchell
Keyword(s):  
Minimum Wage ◽  
Full Employment ◽  
Industrial Relations ◽  
Safety Net ◽  
Wage Determination ◽  
Market Regulation ◽  
Negative Effects ◽  
Wage Setting ◽  
Workplace Relations ◽  
Work Choices

The Workplace Relations Amendment (Work Choices) Act 2005 changes the architecture of labour market regulation in Australia in a significant way. The focus of this article is on changes to the regulatory framework for minimum wage determination and the rationale for, and likely consequences of, conferring this power on the Australian Fair Pay Commission. Underpinning the Work Choices package is the view that Safety Net wage rises awarded by the Australian Industrial Relations Commission have had negative effects on employment. In this article we establish that the evidence to support this claim is weak, and is being used to engineer a historic shift in the objectives of the Australian wage setting process. We argue that the new legislation will act as a downward drag on the pay and conditions of minimum wage workers and advance an alternative policy approach in which attaining full employment does not require us to abandon the principle of fairness or a decent wage floor.

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