Minimum Wages, Equity and Unemployment

1996 ◽  
Vol 7 (2) ◽  
pp. 198-212 ◽  
Author(s):  
J.W. Nevile
Keyword(s):  
Social Security ◽  
Minimum Wage ◽  
Low Income ◽  
Empirical Studies ◽  
Equilibrium Analysis ◽  
Perfect Competition ◽  
Wage Rates ◽  
Income Inequalities ◽  
Teenage Employment ◽  
Low Income Families

Increasing income inequalities in Australia increase the need to protect the incomes of low income families. It is difficult for the taxation and social security system alone to do this. Minimum wage rates have a role to play. Thus, the question of their effects on employment can not be sidestepped Traditional analysis of this question is flawed by the assumption of perfect competition and the use of particular equilibrium analysis. Labour markets have many features which distinguish them from perfectly competitive markets and feedbacks from other markets can not be ignored. Theory alone can not settle this question. A large number of empirical studies are surveyed. A widespread consensus exists that effects of minimum wage rises on adult employment are virtually non-existent A number of studies find effects on teenage employment. A number of others do not. However, even those who find statistically significant effects agree that they are small.

Earnings, EITC, and Employment Responses to a $15 Minimum Wage: Will Low-Income Workers Be Better Off?

2019 ◽  
Vol 33 (4) ◽  
pp. 331-350 ◽  
Author(s):  
Fahad Fahimullah ◽  
Yi Geng ◽  
Bradley Hardy ◽  
Daniel Muhammad ◽  
Jeffrey Wilkins
Keyword(s):  
Minimum Wage ◽  
Low Income ◽  
Computable General Equilibrium ◽  
Computable General Equilibrium Model ◽  
Perfect Competition ◽  
Tax Credit ◽  
Wage Policy ◽  
Policy Makers ◽  
Consumer Prices ◽  
The City

The District of Columbia will increase its minimum wage to $15 per hour in 2020. The city also provides a local refundable earned income tax credit (EITC) equal to 40% of the federal EITC. Using a computable general equilibrium model, the authors estimate the economic impact of the $15 wage policy. They also use a tax policy microsimulation model to estimate how the city’s EITC interacts with a higher minimum wage. Overall, the authors find that the higher minimum wage will produce significant income gains for most of the city’s low-wage workers, with relatively few job losses. Additionally, they forecast that most city EITC recipients will receive a lower EITC, but higher earnings more than offset the reduced tax credit. The model predicts that this policy change would largely be funded by higher consumer prices, lower firm profits, and higher business productivity. These predictions are subject to important caveats, including a local labor market that is likely inadequately characterized in a model assuming perfect competition. Economic policy makers should therefore use such modeling approaches as a powerful but ultimately imperfect tool.

scholarly journals Minimum Wages in Monopsonistic Labor Markets

2020 ◽  
Author(s):  
Luis Felipe Munguia Corella
Keyword(s):  
Labor Markets ◽  
Minimum Wage ◽  
Minimum Wages ◽  
Perfect Competition ◽  
External Shocks ◽  
Omitted Variables ◽  
Heterogeneous Effects ◽  
Wage Effects ◽  
Teenage Employment ◽  
The U.S

Over the last 30 years, researchers have disputed the mixed evidence of the effect of the minimum wage on teenage employment in the U.S. Whenever the minimum wage has positive or no effects on employment, they appeal to monopsony models to explain their results. However, very few of these studies have empirically tested whether their results are due to monopsonistic characteristics in the labor markets. In this paper, I estimate the effects of the minimum wage for the U.S. under concentrated labor markets and low-mobility jobs (two variables that measure monopsony), identify heterogeneous effects among different scenarios derived from the monopsony model, and provide a plausible explanation of the mixed results about the minimum wage effects in the literature. My main findings indicate that minimum wages have an elasticity to teenage employment of -0.418 under perfect competition, which is, as expected, much higher than the usual results in the literature. If the monopsony variable is one standard deviation higher than the baseline, it implies a positive change in elasticity between of 0.05. The minimum wage has a positive insignificant effect between 0.04 and 0.29 under full monopsonistic labor markets. The results are consistent among different specifications and controlling for possible external shocks to the monopsony and omitted variables.

scholarly journals Affordability of Heathy, Equitable and More Sustainable Diets in Low-Income Households in Brisbane before and during the COVID-19 Pandemic

Nutrients ◽  
2021 ◽  
Vol 13 (12) ◽  
pp. 4386
Author(s):  
Amanda J. Lee ◽  
Dori Patay ◽  
Lisa-Maree Herron ◽  
Ru Chyi Tan ◽  
Evelyn Nicoll ◽  
...  
Keyword(s):  
Minimum Wage ◽  
Low Income ◽  
Household Income ◽  
Food Groups ◽  
Sustainable Diets ◽  
Cost Differential ◽  
Low Income Families ◽  
The Cost ◽  
The Impact ◽  
Low Income Households

The COVID-19 pandemic has increased food insecurity worldwide, yet there has been limited assessment of shifts in the cost and affordability of healthy, equitable and sustainable diets. This study explores the impact of the COVID-19 pandemic and income supplements provided by the Australian government on diet cost and affordability for low-income households in an Australian urban area. The Healthy Diets ASAP method protocol was applied to assess the cost and cost differential of current and recommended diets before (in 2019) and during the COVID-19 pandemic (late 2020) for households with a minimum-wage and welfare-only disposable household income, by area of socioeconomic disadvantage, in Greater Brisbane, Queensland, Australia. Data were collected between August and October, 2020, from 78 food outlets and compared with data collected in the same locations between May and October, 2019, in an earlier study. The price of most healthy food groups increased significantly during the pandemic—with the exception of vegetables and legumes, which decreased. Conversely, the price of discretionary foods and drinks did not increase during the pandemic. The cost of the current and recommended diets significantly increased throughout this period, but the latter continued to be less expensive than the former. Due to income supplements provided between May and September 2020, the affordability of the recommended diet improved greatly, by 27% and 42%, for households with minimum-wage and welfare-only disposable household income, respectively. This improvement in the affordability of the recommended diet highlights the need to permanently increase welfare support for low-income families to ensure food security.

scholarly journals Culturally Optimised Nutritionally Adequate Food Baskets for Dietary Guidelines for Minimum Wage Estonian Families

Nutrients ◽  
2020 ◽  
Vol 12 (9) ◽  
pp. 2613
Author(s):  
Janne Lauk ◽  
Eha Nurk ◽  
Aileen Robertson ◽  
Alexandr Parlesak
Keyword(s):  
Minimum Wage ◽  
Low Income ◽  
Dietary Guidelines ◽  
Reproductive Age ◽  
Noncommunicable Diseases ◽  
Average Deviation ◽  
Low Socioeconomic ◽  
Adequate Food ◽  
Health Promoting ◽  
Low Income Families

Although low socioeconomic groups have the highest risk of noncommunicable diseases in Estonia, national dietary guidelines and nutrition recommendations do not consider affordability. This study aims to help develop nutritionally adequate, health-promoting, and culturally acceptable dietary guidelines at an affordable price. Three food baskets (FBs) were optimised using linear programming to meet recommended nutrient intakes (RNIs), or Estonian dietary guidelines, or both. In total, 6255 prices of 422 foods were collected. The Estonian National Dietary Survey (ENDS) provided a proxy for cultural acceptability. Food baskets for a family of four, earning minimum wage, contain between 73 and 96 foods and cost between 10.66 and 10.92 EUR per day. The nutritionally adequate FB that does not follow Estonian dietary guidelines deviates the least (26% on average) from ENDS but contains twice the sugar, sweets, and savoury snacks recommended. The health-promoting FB (40% deviation) contains a limited amount of sugar, sweets, and savoury snacks. However, values for vitamin D, iodine, iron, and folate are low compared with RNIs, as is calcium for women of reproductive age. When both the RNIs and dietary guidelines are enforced, the average deviation (73%) and cost (10.92 EUR) are highest. The composition of these FBs can help guide the development of dietary guidelines for low income families in Estonia.

scholarly journals Minimum wages in monopsonistic labor markets

2020 ◽  
Vol 9 (1) ◽  
Author(s):  
Luis F. Munguía Corella
Keyword(s):  
United States ◽  
Labor Markets ◽  
Minimum Wage ◽  
The United States ◽  
Minimum Wages ◽  
Perfect Competition ◽  
External Shocks ◽  
Omitted Variables ◽  
Heterogeneous Effects ◽  
Teenage Employment

AbstractOver the last 30 years, researchers have disputed the mixed evidence of the effect of the minimum wage on teenage employment in the United States. Whenever the minimum wage has positive or no effects on employment, they appeal to monopsony models to explain their results. However, very few of these studies have empirically tested whether their results are due to monopsonistic characteristics in the labor markets. In this article, I estimate the effects of the minimum wage for the United States under concentrated labor markets and low-mobility jobs (two variables that measure monopsony), identify heterogeneous effects among different scenarios derived from the monopsony model, and provide a plausible explanation of the mixed results about the minimum wage effects in the literature. My main findings indicate that minimum wages have an elasticity to teenage employment of −0.418 under perfect competition, which is, as expected, much higher than the usual results in the literature. If the monopsony variable is one standard deviation higher than the baseline, it implies a positive change in elasticity of 0.05. The minimum wage has a positive insignificant effect between 0.04 and 0.29 under full monopsonistic labor markets. The results are consistent among different specifications and in controlling for possible external shocks and omitted variables.

scholarly journals Missing out: The intergenerational ramifications of current social security arrangements

2018 ◽  
Vol 43 (3) ◽  
pp. 163-168 ◽  
Author(s):  
Caitlyn Lehmann ◽  
Jennifer Lehmann ◽  
Rachael Sanders
Keyword(s):  
Social Security ◽  
Low Income ◽  
Safety Net ◽  
Neoliberal Reforms ◽  
The Social ◽  
Modern Welfare State ◽  
Low Income Families ◽  
The Uk ◽  
Welfare Payment ◽  
The Ideal

Neoliberal reforms and ring-wing ideologies have seen the ideal of the social security ‘safety net’ take a hammering in the UK, USA and Australia. While the gap between rich and poor has widened, and demand for welfare payments increased, politicians, certainly in Australia, have generally neglected low income families, preferring to twiddle the economic dials affecting middle and upper income earners instead. Of course, tussling over who pays tax, how much, what constitutes useful expenditure, and who receives welfare services and benefits is not new – these questions have attended the modern welfare state from its inception. But the welfare safety net that most of us, grudgingly or otherwise, concede to be necessary for collective social harmony is no longer proving as effective as we would wish. Even with a battered and frayed, but still ostensibly functional systems of welfare payment and support offered in Australia, the number of people experiencing perpetual disadvantage is rising, with intergenerational poverty – its increase and impacts on children – of particular concern.

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