Friday, January 15, 2016

The hidden history of the minimum wage in America

Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan's Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for and the AEIdeas blog.
Don [George Mason University economics professor Don Boudreaux] has emphasized a very important, but usually overlooked or neglected reason that some empirical studies fail to find negative employment effects following increases in the minimum wage government-mandated wage floor that guarantees reduced employment opportunities for America’s teenagers and low-skilled workers (especially minorities). That reason has to do with the fact that the minimum wage has been in effect for almost 80 years since the Fair Unfair to Unskilled Labor Standards Act was passed in 1938, and it’s been increased 27 times since then. Therefore, the government’s mandated market-suppressing, artificial wage for low- and un-skilled workers has been around for such a long time, and it’s been raised so many times, that the distortionary effects of the minimum wage have long ago been “internalized” by employers who hire unskilled workers.

No comments: