Monday, January 16, 2017

"Looking at Historical Experience, There Is No Obvious Relationship between the Minimum Wage and Unemployment"

"This conviction that the minimum wage hurts the poor is an example of economism in action. Economists have many different opinions on the subject, based on different theories and research studies, but when it comes to public debate, one particular result of one particular model is presented as an unassailable economic theorem. (Politicians advocating for a higher minimum wage, by contrast, tend to avoid economic models altogether, instead arguing in terms of fairness or helping the poor.) This happens partly because the competitive market model taught in introductory economics classes is simple, clear, and memorable. But it also happens because there is a large interest group that wants to keep the minimum wage low: businesses that rely heavily on cheap labor."

James Kwak at The Atlantic argues that "introductory economics can be more misleading than it is helpful."

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