scholarly journals Minimum Wages, Morality, and Efficiency: A Choice Experiment

2019 ◽  
Vol 109 ◽  
pp. 176-181
Author(s):  
Conor Lennon ◽  
Jose Fernandez ◽  
Stephan Gohmann ◽  
Keith Teltser

We use a choice experiment to examine public support for minimum wages. We first elicit respondents' moral assessment of two labor market systems: one with a minimum wage and one without. Then, we present four pairs of hypothetical employment outcomes and ask respondents to “vote.” Our estimates suggest that the average respondent requires a 4.65 percentage point reduction in unemployment before they would support a system without a minimum wage. We also find that equity matters; respondents are 11.1 percentage points less likely to support a minimum wage if it disproportionately affects minorities and females.

ILR Review ◽  
2019 ◽  
Vol 73 (1) ◽  
pp. 153-177
Author(s):  
Mark Borgschulte ◽  
Heepyung Cho

The authors study the effect of the minimum wage on the employment outcomes and Social Security claiming of older US workers from 1983 to 2016. The probability of work at or near the minimum wage increases substantially near retirement, and previous researchers and policies suggest that older workers may be particularly vulnerable to any disemployment effects of the minimum wage. Results show no evidence that the minimum wage causes earlier retirements. Instead, estimates suggest that higher minimum wages increase earnings and may have small positive effects on the labor supply of workers in the key ages of 62 to 70. Consistent with increased earnings and delayed retirement, higher minimum wages decrease the number of Social Security beneficiaries and amount of benefits disbursed. The minimum wage appears to increase financial resources for workers near retirement.


2013 ◽  
Vol 51 (2) ◽  
pp. 558-560

Etienne Wasmer of Sciences Po and LIEPP reviews, “The Minimum Wage and Labor Market Outcomes” by Christopher J. Flinn. The Econlit abstract of this book begins: “Presents a model based on search and bargaining to use in investigating the impact of a minimum wage on labor market outcomes. Discusses descriptive evidence on minimum wage effects; a model of minimum wage effects on labor market careers; labor market and welfare impacts of minimum wages; minimum wage effects on labor market outcomes—a selective survey; assessing the welfare impacts of actual changes in the minimum wage; econometric issues; model estimates and tests; optimal minimum wages; the on-the-job search; and heterogeneity. Flinn is Professor of Economics at New York University and Senior Research Fellow at Collegio Carlo Alberto.”


Pained ◽  
2020 ◽  
pp. 115-118
Author(s):  
Michael D. Stein ◽  
Sandro Galea

This chapter studies the effects of wages on health. A 2018 health policy brief in Health Affairs highlights fluctuations in wages and how population health reflects these changes. In the brief, the authors emphasize that the labor market does not strictly follow basic economic assumptions. In particular, an increase in wages may not reduce quantity or quality of work, as an economist critiquing minimum wage hikes might expect. Instead, the study’s authors argue that increased wages can improve productivity by boosting morale. Wages between 1979 and 2013 rose notably only for those with very high pay; people in the middle wage group have not seen much of an increase in pay over the years. Meanwhile, those with very low wages have almost exclusively seen drops in their pay over the decades. The study authors then explain how increases in the minimum wage can positively impact health, citing prior research on the connections to lower smoking, fewer missed work days, and improved birthweight. With many states looking to raise their minimum wages, the authors recommend that those still caught in the debate should approach the decision from both a health and economic perspective.


2018 ◽  
Vol 78 (3) ◽  
pp. 785-821
Author(s):  
Andrew J. Seltzer ◽  
Jeff Borland

This article examines the effects of the Victorian Factory and Shops Act, the first minimum wage law in Australia. The Act differed from modern minimum wage laws in that it established Special Boards, which set trade-specific minimum wage schedules. We use trade-level data on average wages and employment by gender and age to examine the effects of minimum wages. Although the minimum wages were binding, we find that the effects on employment were modest, at best. We speculate that this was because the Special Boards, which were comprised of industry insiders, closely matched the labor market for their trades.


2021 ◽  
Author(s):  
Julia Raifman ◽  
Elaine Nsoesie ◽  
Lorraine T. Dean ◽  
Katherine Gutierrez ◽  
Will Raderman ◽  
...  

AbstractIntroductionPeople in low-income households face a disproportionate burden of health and economic consequences brought on by the COVID-19 pandemic, including COVID-19 and food insufficiency. State minimum wage and paid sick leave policies may affect whether people are vulnerable to employment and health shocks to income and affect food insufficiency.MethodsWe evaluated the relationship between state minimum wage policies and the outcome of household food insufficiency among participants younger than 65 during the COVID-19 pandemic. We used data from biweekly, state representative Census Pulse surveys conducted between August 19 and December 21, 2020. We conducted analyses in the full population under age 65 years, who are most likely to work, and in households with children. The primary exposure was state minimum wage policies in four categories: less than $8.00, $8.00 to $9.99, $10.00 to $11.99, and $12.00 or more. A secondary exposure was missing work due to COVID-19, interacted with whether participants reported not having paid sick leave. Food insufficiency was defined as sometimes or often not having enough to eat in the past seven days. Very low child food sufficiency was defined as children sometimes or often not eating enough in the past seven days because of inability to afford food. We conducted a multivariable modified Poisson regression analysis to estimate adjusted prevalence ratios and marginal effects. We clustered standard errors by state. To adjust for state health and social programs, we adjusted for health insurance and receipt of supplemental nutrition assistance program benefits, unemployment insurance, and stimulus payments. We conducted subgroup analyses among populations most likely to be affected by minimum wage policies: Participants who reported any work in the past seven days, who reported <$75,000 in 2019 household income, or who had a high school education or less. We conducted falsification tests among participants less likely to be directly affected by policies, ≥65 years or with >$75,000 in 2019 household income.ResultsIn states with a minimum wage of less than $8.00, 14.3% of participants under age 65 and 16.6% of participants in households with children reported household food insufficiency, while 10.3% of participants reported very low child food sufficiency. A state minimum wage of $12 or more per hour was associated with a 1.83 percentage point reduction in the proportion of households reporting food insufficiency relative to a minimum wage of less than $8.00 per hour (95% CI: −2.67 to −0.99 percentage points). In households with children, a state minimum wage of $12 or more per hour was associated with a 2.13 percentage point reduction in household food insufficiency (95% CI: −3.25 to −1.00 percentage points) and in very low child food sufficiency (−1.16 percentage points, 95% CI: −1.69 to −0.63 percentage points) relative to a state minimum wage of less than $8.00 per hour. Minimum wages of $8.00 to $9.99 and $10.00 to $11.99 were not associated with changes in child food insufficiency or very low child food sufficiency relative to less than $8.00 per hour. Subgroup analyses and sensitivity analyses were consistent with the main results. Estimates were of a lesser magnitude (<0.6 percentage points) in populations that should be less directly affected by state minimum wage policies. Missing work due to COVID-19 without paid sick leave was associated with a 5.72 percentage point increase in the proportion of households reporting food insufficiency (95% CI: 3.59 to 7.85 percentage points).DiscussionFood insufficiency is high in all households and even more so in households with children during the COVID-19 pandemic. Living in a state with at least a $12 minimum wage was associated with a decrease in the proportion of people reporting food insufficiency during the COVID-19 pandemic. Not having paid leave was associated with increases in food insufficiency among people who reported missing work due to COVID-19 illness. Policymakers may wish to consider raising the minimum wage and paid sick leave as approaches to reducing food insufficiency during and after the COVID-19 pandemic.


2021 ◽  
Vol 35 (1) ◽  
pp. 3-26
Author(s):  
Alan Manning

It is hard to find a negative effect on the employment effect of rises in the minimum wage: the elusive employment effect. It is much easier to find an impact on wages. This paper argues the elusive employment effect is unlikely to be solved by better data, methodology, or specification. The reasons for the elusive employment effect are the factors contributing to why the link between higher minimum wages and higher labor costs are weaker than one might think and because imperfect competition is pervasive in the labor market.


2021 ◽  
pp. 0160323X2110008
Author(s):  
Shanna Rose

This article analyzes state legislative and ballot measure activity related to the minimum wage between 2003 and 2020. The analysis distinguishes proposals to raise the minimum wage from those to index it to the annual rate of inflation, and examines the proposed dollar amount, the process used (legislation vs. ballot measure), and the measure’s success or failure. The analysis suggests that state activity tends to increase when the minimum wage rises on the federal policy agenda, and that partisanship and ideology also play a central role in efforts to raise and index state minimum wages.


2013 ◽  
Vol 14 (3) ◽  
pp. 282-315 ◽  
Author(s):  
Bodo Aretz ◽  
Terry Gregory ◽  
Melanie Arntz

Abstract This study contributes to the sparse literature on employment spillovers of minimum wages. We exploit the minimum wage introduction and subsequent increases in the German roofing sector that gave rise to an internationally unprecedented hard bite of a minimum wage. We look at the chances of remaining employed in the roofing sector for workers with and without a binding minimum wage and use the plumbing sector that is not subject to a minimum wage as a suitable benchmark sector. By estimating the counterfactual wage that plumbers would receive in the roofing sector given their characteristics, we are able to identify employment effects along the entire wage distribution. The results indicate that the chances for roofers to remain employed in the sector in eastern Germany deteriorated along the entire wage distribution. Such employment spillovers to workers without a binding minimum wage may result from scale effects and/or capital-labour substitution.


2017 ◽  
Vol 47 (1) ◽  
pp. 87-111
Author(s):  
Chia-Hui Lu

This article studies the optimal government policies related to unemployment in a frictional labor market. To achieve the optimal allocation, we find that the government should not issue unemployment compensation or subsidies for hiring costs. Moreover, as both firms and households experience disastrous consequences related to the minimum wage, the government should not intervene in the labor market to influence the wage rate and should not set any minimum wage. What the government can do is to make appropriate expenditures on matching efficacy. Furthermore, considering heterogeneous labor abilities in the model does not change our main finding.


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