Law of demand sentences to ponder

Adam Ozimek writes:

First, some look at the minimum wage literature and conclude that employers’ demand for low-skilled workers isn’t responsive to wage changes. However, there is relatively widespread agreement that the EITC increases labor force participation, which can be true only if employers are responding to lower wages by hiring more.

Immediately thereafter he makes a good point on the claim that EITC and minimum wages are “complementary” policies:

For a “complementary” minimum wage to prevent lower wages, it must also prevent the added labor force participation. In other words, lower wages are why employment goes up. If you stop the low wages, you stop the employment gains.

Do read the whole thing.


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