More on the Minimum Wage

December 4th, 2013 at 7:58 am

Lots of action and discussion on the issue of raising the wage floor.  The President is likely to discuss the issue at an economics speech later today, and just yesterday the DC Council “unanimously endorsed an $11.50-an-hour minimum wage for the nation’s capital Tuesday, completing a rare act of regional cooperation with the Maryland suburbs and setting up a stark contrast with the $7.25 federal minimum wage.”

And I’ve got something new on the topic over at the NYT Economix blog, including an important graphic showing the evolving demographics of low-wage workers–they’re older with more education than they used to be.

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2 comments in reply to "More on the Minimum Wage"

  1. smith says:

    Important for those on minimum, and has a ripple effect, but back of the envelope says less than $20 billion/year after phase in, not enough to budge economy or help employment, .1% of GDP.

    To note, polls show raising the minimum wage has strong and broad support. We are grateful Obama supports it vs. alternative universe Republican president threatening a veto. But strong public support shows leadership is not required, and cynically one observes it’s in the Democrats and Obama’s self interest to back the bill, and back the Republicans into a corner.
    In a poll last month by CBS News, two-thirds of Americans — including more than half of Republicans — said the federal minimum wage should be higher.
    In July, on the fourth anniversary of the most recent minimum wage increase, Mr. Harkin and Mr. Miller stepped up their effort, citing a poll by Hart Research that found that 80 percent of Americans support increasing the minimum to $10.10. The Hart poll found that 92 percent of Democrats, 80 percent of independents and 62 percent of Republicans backed their proposal.

    Mankiw specifically mentions Krugman’s recent column supporting a higher minimum, questions selectivity of supporting research, and gives a nber paper that claims a .3 effect on teenage employment. However that paper’s authors accuse others of cherry picking data, but are they the ones in fact picking the cherries? (discounts recessions and contiguous counties vs counties with previously similar patterns).

  2. Kevin Rica says:

    Here’s another argument for the minimum wage:

    Unfortunately, it’s just not that easy. The minimum wage is not a substitute for immigration enforcement. It’s a do-or-die requirement for immigration enforcement.

    In fact, immigration enforcement is a substitute for raising the minimum wage. Unlike the minimum wage, there is no risk of raising unemployment. Increasing immigration enforcement reduces the size of the labor pool, reduces unemployment, and thus raises wages. Thus the higher wages/higher unemployment trade-off is eliminated.