Do The Working Poor Make Too Much?

an article in Boston Magazine by Barry Nolan:

 “One frequently cited study of recent minimum wage increases, co-authored by Alan B. Kruger, one of the most highly regarded economists in the country, concluded that there is “no indication that the rise in the minimum wage reduced employment.” In the real world, a modest increase in the minimum wage apparently can produce more consumer spending, lead to less job turnover, and spur modest job growth.

Professor Arindrajit Dube of UMass Amherst is another economist who has done extensive research in the real world, including a study that analyzed “employment trends for several categories of low-wage workers over a 16-year period in all counties sharing a common border with a county in another state where minimum wage increases occurred.” I thought he might be a better person to ask about the subject than Jacoby. So, I asked him what the economy might look like if there were no minimum wage laws.

“… you would see certain workers — who have a difficult time — stuck with wages that pay substantially below their productivity and greater deprivation among those who are most exploitable,” Dube said. He was too much of a gentleman to say it the way I might put it: “There would be a race to the bottom for wages, and poor people would really get screwed.””


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