It is a mistake to believe that the minimum wage helps low-income households, the workers, and, to a lesser extent, even among the high-income households. For Hong Kong to genuinely address poverty, it is far more important to study much more comprehensively the real incidence and causes of poverty and not let politics get in the way. The provision of a basic income is a far better policy than a minimum wage. Has minimum wage made a difference in helping low-income households and reducing income inequality? What effect has it had on labor market employment and unemployment?
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.”
Minimum Wage Effects on Labor Market Outcomes Under Search with Bargaining