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Friday, October 09, 2015

'The Minimum Wage: How Much is Too Much?'

Alan Krueger:

The Minimum Wage: How Much is Too Much?: The federal minimum wage has been stuck at $7.25 an hour since 2009. While Congress has refused to take action, Democratic politicians have been engaged in something of a bidding war to propose raising the minimum wage ever higher: first to $10.10, then to $12, and now some are pushing for $15 an hour. ...
When I started studying the minimum wage 25 years ago,... research that I and others ... conducted convinced me that if the minimum wage is set at a moderate level it does not necessarily reduce employment. ...
Although available research cannot precisely answer these questions, I am confident that a federal minimum wage that rises to around $12 an hour over the next five years or so would not have a meaningful negative effect on United States employment. ...
But $15 an hour is beyond international experience, and could well be counterproductive. ...
Economics is all about understanding trade-offs and risks. The trade-off is likely to become more severe, and the risk greater, if the minimum wage is set beyond the range studied in past research.

    Posted by on Friday, October 9, 2015 at 09:26 AM in Economics | Permalink  Comments (71)


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