Assorted links

by on March 14, 2011 at 11:44 am in Uncategorized | Permalink

1 Cliff March 14, 2011 at 12:00 pm

So, #5 means that the minimum wage in the U.S. is generally low enough not to significantly effect the labor market? Is anyone figuring out what the relevant margin is where there would be an effect?

I guess this study suggests the minimum wage is good for old-timers working minimum wage jobs, since it increases their pay, while harming teens and others looking to get experience by making it more difficult to get the jobs (though supposedly the overall effect is positive).

2 Careless March 14, 2011 at 12:42 pm
3 John Thacker March 14, 2011 at 12:46 pm

If I’m reading it correctly, the minimum wage paper finds that the states with higher minimum wages have slower overall employment growth, conjectures that “Since overall employment growth is not plausibly affected by minimum wage variation, we are observing time-varying differences in the underlying characteristics of the states,” and then proceeds to correct entirely for overall employment growth. After doing so, it finds that the minimum wage does not substantially affect employment growth of those only making minimum wage; that is, while employment of those at minimum wage levels grows slower in the states with a higher minimum wage, it grows more slowly at basically the same rate as employment in general in those states grows more slowly.

4 John Thacker March 14, 2011 at 12:53 pm

The paper also notes that:

Considering the seventeen states (plus Washington, D.C.) that had a minimum wage above the federal level in 2005, average employment growth in these states was consistently lower than employment growth in the rest of the country between 1991 and 1996. These two groups then had virtually identical growth between 1996 and 2006.

I can’t help but notice that the federal minimum wage increased twice between 1991 and 1996 after a long period of being held flat, and then was constant from 1996 to 2006 before being raised again multiple times just as our recession started. I certainly have not thought through all the implications of that, but it doesn’t seem on a read through the paper that they address that issue. I really have to think that it’s much more than a coincidence, if you find some sort of strong minimum wage effect from 1991 to 1996, while the federal minimum wage is being raised, that is then diminished from 1996 to 2006 while the federal minimum wage stays stagnant and affects fewer and fewer workers.

5 mbt footwear March 15, 2011 at 11:09 pm

it finds that the minimum wage does not substantially affect employment growth of those only making minimum wage

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