Waubonsee Community College

What does the minimum wage do?, Dale Belman, Paul J. Wolfson

eng

Includes bibliographical references (pages 425-445) and indexes

index present

non fiction

What does the minimum wage do?

bibliography

875771424

Dale Belman, Paul J. Wolfson

"The minimum wage debate is, among other things, contentious, polarizing, and at the forefront of ongoing political debate. Some argue that raising the minimum wage will pull working individuals and families out of poverty while reducing income inequality at an acceptable cost to society. Others contend that raising the minimum wage is a job killer: that when the cost of labor increases, demand for that labor decreases. Supporters of this argument cite a February 2014 CBO report that points to potential job losses numbering 500,000 as a result of President Obama’s proposed national minimum wage increase to $10.10 an hour. Others, including noted economists, criticize the report for being based on “off-the-shelf estimates” and say that it fails to put an emphasis on the more rigorous studies examined in the report. And while policymakers have voted recently to increase the minimum wage in several states and municipalities, it will be years before the impacts of these increases, if any, will be detectable. The bottom line is that all the debate and recent action by policymakers does little to add clarity to the effects of raising the minimum wage. Finally, this book helps settle the issue. Based on a rigorous meta-analysis of more than 200 scholarly publications published since 1991 (most after 2000) that address the various impacts of raising the minimum wage, What Does the Minimum Wage Do? presents the most comprehensive, analytical, and unbiased assessment of the effects of minimum wage increases that has ever been produced. Authors Dale Belman and Paul J. Wolfson look at several outcomes influenced by increases in the minimum wage, how long it takes those outcomes to respond, the magnitude of effects, why increases in the minimum wage have the results they do, and the workers most likely to be impacted. Their painstaking analysis focuses mainly on studies using data from the United States, but also includes studies that focus on Canada, Australia, New Zealand, the UK, and other western European nations. This breadth and depth of investigation on the impacts of hikes in the minimum wage clarifies the issues surrounding, among other things, employment, wages, poverty and inequality, and effect by gender, and allows them to conclude the following: Moderate increases in the minimum wage, characteristic of the United States over the last half of the twentieth century, have the effect that was intended by the original supporters of such action: raising the minimum wage substantially increases the earnings of those at the bottom of the income distribution and reduces wage inequality; Negative effects on employment resulting from increases in the minimum wage were too small to be statistically detectable in the meta-analysis. Therefore, Belman and Wolfson conclude, employment effects are too modest to have meaningful consequences for public policy in the dynamically changing U.S. labor market; Evidence of positive spillover effects on the wages of those earning slightly more than the new minimum wage is mixed, but it generally supports their existence, particularly for women; The minimum wage should be seen as one of a set of policy tools aimed at improving the standard of living of the less well-off, and moderate increases in the minimum wage would likely aid low-income individuals and families, with acceptable costs to the nation. Interested in the effects of raising the minimum wage? If so, What Does the Minimum Wage Do? is essential reading."--Publisher's website

1. Minimum wage and the distribution of hourly earnings ; Three labor market models used in new minimum wage research ; An overview of the book -- pt. 1. Micro. 2. Employment : Early new minimum wage research ; The new minimum wage research since 2000 ; U.S. studies ; Other developed countries ; The timing of the employment response -- 3. Hours of employment : U.S. studies ; Other developed countries ; Summing up -- 4. Meta-analysis : A brief survey of recent prior work ; The data ; Metaregressions, part 1 ; Metaregressions, part 2 -- 5. Wages and earnings : Measuring the effects of the minimum wage ; Wage distribution ; Sectoral and industry studies ; Workers who are bound by the new minimum wage ; Spillover effects -- 6. Human capital : The logic of individual and firm investment in human capital ; Human capital and the minimum wage ; The effect of the minimum wage on school enrollment: theory and findings ; The minimum wage and employer-supplied training: theory and findings ; The minimum wage and employer-provided benefits: health care and pensions -- 7. Poverty and inequality : Inequality and the distribution of wages ; The effect of the minimum wage on poverty and economic inequality ; How long do minimum wage earners continue to earn the minimum wage? -- pt. 2: Macro. 8. Gross flows in the labor market : Data issues ; Studies of gross flows that lean heavily on specific labor market models ; Studies of gross flows that are agnostic about labor market models ; Discussions of findings on separations and accessions -- 9. Labor force participation rate, unemployment, and vacancies : Labor force participation ; The unemployment rate ; Unemployment duration ; Vacancies -- 10. The product market : Prices ; Output ; Profitability -- 11. A summary of our findings ; What we know with confidence ; Big ideas ; Issues of innovation and craftsmanship ; Intended consequences -- Appendix A: Data sources and variables