Recent minimum wage increases and the minimum wage labor force

Coclusion  Recently Whaples (1996) reported that most labor economists believe that minimum wage laws decrease employment. Despite this, policy makers have continued to periodically raise the minimum, with the most recent increases occurring in October 1996 and September 1997. The various analyses done by Card, Katz, and Krueger, that showed little to no employment effect of past minimum wage increases, have provided additional ammunition for those who would seek further increases. However, using the estimates of Williams and Mills (1998), we demonstrate that the latest minimum wage increases substantially decreased employment for both sexes. We believe that future increases will do likewise.     

The labor market effects of minimum wage laws: A new perspective

Economists almost uniformly argue that minimum wage laws benefit some workers at the expense of other workers. This argument is implicitly founded on the assumption that money wages are the only form of labor compensation. Based on the more realistic assumption that labor is paid in many different ways, the analysis of this paper demonstrates that all laborers within a perfectly competitive labor market are adversely affected by minimum wages. Although employment opportunities are reduced by such laws, affected labor markets clear. Conventional analysis of the effect of minimum wages on monopsony markets is also upset by the model developed. The author is indebted to Rex Cottle, Benjamin Hawkins, Hugh Macaulay, Michael Maloney, Thomas Schaap, Gordon Tullock, Gene Uselton, and Karen Vaughn for helpful comments on earlier drafts of this paper.     

Nepotism and the minimum wage

That an increase in the minimum wage or minimum wage coverage results in an increase in the incidence of nepotism is empirically tested using 1972 data on job-seeking methods used by American workers. The elasticity of the incidence of nepotism with respect to the level of the minimum wage and minimum wage coverage in 1977 is estimated at between .38 and .68. I would like to thank Peter Montiel and Geoffrey Woglom for their helpful comments and suggestions and Bruce Chesebrough for providing the stimulus to write this paper; remaining errors are my own.     

State minimum wage laws: Youth coverage and impact

Federal minimum wage statutes cover only 70 percent of the work force and 30 percent of all employers. State laws are designed to close some of these coverage gaps and in some cases to set higher wage floors. Hence, differences in state wage floors and coverage should affect employment rates and wage distributions, particularly among low-skilled workers. Evidence from the National Longitudinal Ssurveys of Youth is mixed, however: State wage floors appear to have no impact on youth employment or entry wages, but coverage exemptions appear to increase both employment and wages. These observations underscore the need to include state provisions in models of minimum wage impacts, particularly for later periods (e.g., 1988–1991) when state wage floors were relatively higher.     

Direct and indirect effects of unionization on the wage levels of nurses: A case study of New Jersey hospitals

This study examines the determination of wage rates for nurses in hospital employment. Of particular concern is the effect of the recent increase in unionization by nurses on their wages, both directly and indirectly via threats from competing hospitals’ unionization. To improve on earlier work, the data are disaggregated and gathered from only one state to standardize for the legal, licensing, and reimbursement systems. We also look at the difference between highly skilled professional nurses, RN’s, and more general and less professional nurses, LPN’s. The results show that working conditions and competition in the market influence the wage rate as one would expect. The unionization of nurses, however, affects the wage levels differently for the two groups. We would like to thank Professors Robert Higgs and Alan Childs of Lafayette College, Professor David Fairris of Williams College, Professor James C. Luzier of Muhlenberg College, and an anonymous referee for their helpful comments and suggestions.     

By our bootstraps: Origins and effects of the high-wage doctrine and the minimum wage

Conclusion  Although the high-wage doctrine — the belief that the level of aggregate demand is determined by the level of wage rates — is most often associated with the Great Depression, the doctrine’s effects on wage policy go back at least two decades further. Rather than having been a product of desperate times, the doctrine gained wide acceptance during the prosperous 1920s as businessmen and economists, citing the success of Henry Ford's continuing high-wage policies, and the (supposedly counterproductive) wage deflation that had marked the steep depression of 1920-21, applied the doctrine's demand-enhancing logic to push for an economy-wide minimum wage. The authors thank Fred Bateman, Don Bellante, Roger Garrison, Peter Klein, and Anthony Patrick O’Brien for thoughtful comments and suggestions.     

Fixing minimum wage levels in developing countries: Common failures and remedies

Some developing countries have set their minimum wages too high or too low to constitute a meaningful constraint on employers. The article compares minimum wages worldwide, proposes several ways of measuring them in developing countries and discusses whether they are effective thresholds in those countries. The second part of the article considers the institutional factors leading countries to set minimum wages at extreme levels. The author concludes that the minimum wage is used as a policy instrument to several ends – wage negotiation, deflation and social dialogue – which results in the absence of a wage floor, weak collective bargaining, or non‐compliance.     

Economic growth and inequality in Singapore: The case for a minimum wage

In the context of Singapore's ageing population, the employment of large numbers of low‐skilled foreign workers is proving to be a major challenge to inclusive growth because of the stagnation of low‐wage workers' incomes. In order to address this problem, the author makes the case for introducing a minimum wage to complement existing in‐work benefit schemes. After addressing the commonly voiced objections to a minimum wage system, he suggests ways in which a minimum wage could be implemented in Singapore. New measures to enhance the social safety net and foster more sustainable economic growth are also proposed.     

Reducing poverty and inequality through tax-benefit reform and the minimum wage: the UK as a case-study

Atkinson’s book Inequality: What Can Be Done? (Harvard University Press, 2015) sets out a range of concrete proposals aimed at reducing income inequality, which cover a very broad span but include major changes to the income tax and social transfers system and the minimum wage. These are framed with specific reference to the UK but have much broader relevance in demonstrating how substantial the impact on inequality of such measures could be. This paper assesses the first-round effects of these tax, transfer and minimum wage reforms on income inequality and poverty based on a microsimulation approach using EUROMOD. The reforms involve a significantly more progressive income tax structure, a major increase in the minimum wage to the level which is estimated to represent the ‘Living Wage’, and alternative routes to reforming social transfers – either to strengthen the social insurance element or to restructure the entire system as a Participation Income (a variant of Basic/Citizen’s Income). The results show how the first-round effects of either set of tax and transfer proposals would be to substantially reduce the extent of income inequality and relative income poverty and the paper draws out how the two approaches differ in their effects. The additional impact of raising the minimum wage to the Living Wage is modest, reflecting in particular the position of beneficiaries in the household income distribution and the offsetting effects on household income of the withdrawal of means-tested cash transfers.     

The impact of the minimum wage in West Virginia: A test of the low-wage-area theory

VI. Conclusions West Virginia counties do provide evidence of significant dis-employment due to the minimum wage, a finding that supports the theory that low-wage areas are more susceptible to employment losses when the legislated minimum wage is increased. My results show that a 10 percent increase in the minimum wage will reduce total employment in the average West Virginia county by 1.1 percent. The most rural counties may also respond more severely, up to 1.4 percent for the same minimum wage change. I thank Clifford Hawley, Sudeshna Bandypadhyay, George Hammond, Stratford Douglass, Brian Cushing, Tom Garrett, Victor Claar, Gary Wagner, and an anonymous referee for helpful comments.     

The illegal alien work force,demand for unskilled labor,and the minimum wage

Estimates of the illegal alien work force, employment, and the number employed below the legal minimum wage are not available, but are often required for the study of a variety of public policy issues, e.g., immigration and refugee policy, and policy towards the monitoring of minimum wage laws. This paper attempts to fill this void by developing estimates of these quantities. Of equal importance, however, is determining what light this and other related evidence throws upon the oft-expressed view that the demand for unskilled labor at below-legal-minimum wage rates is virtually inelastic. Evidence is presented which contradicts this belief. I am grateful to Janet Hunt and Richard H. Timberlake, Jr. for valuable comments but I absolve them of responsibility for any errors.     

The employment effects of social security tax changes and minimum wage regulations: A case study of the American restaurant industry

Several recent changes in public policy in the United States have significantly affected labor market conditions in the restaurant industry. First, at the close of 1987, Congress passed legislation requiring employers to pay, for the first time, Social Security taxes (hereinafter FICA) on the tip incomes of restaurant employees. Second, after a long hiatus, there were two successive increases in the federal minimum wage law — one on April 1, 1990, and the second exactly one year later. This study attempts to measure the employment effects of these policy changes and, in the process, to illuminate how seemingly minor changes in public policy may have very substantial effects on markets.     

Accounting for the permanent vs temporary wage gaps among young adults: Three European countries in perspective

This article analyses wage differentials between permanent and temporary workers in the 25–40 age bracket using the 2010 European Union Statistics on Income and Living Conditions (EU‐SILC) wave data for France, Germany and Italy. Applying a Recentered Influence Function (RIF) regression and a reweighting estimation technique, we investigate the contribution of personal and job characteristics to wage differentials across the wage distribution. Results point to a large unexplained component of the wage gap across the whole distribution in Italy, while this component is weaker in France among highly paid employees and insignificant in Germany. These findings highlight potential policy considerations and areas for future research.     

Fast food,happiness and the misery of behavioural science

Beginning with a journalistic criticism, written by a humanist, of studies by behavioural scientists of fast-food cues, this essay goes on to describe the nature of fast-food environments today. It then develops a critique of the underlying assumptions and methods of behavioural science as exemplified in these studies, whose basic context is the field of ‘happiness studies’. This essay argues that happiness cannot be quantified; that attempts to quantify it, though well-meaning, and generally aimed toward a critique of neoliberal utilitarianism, actually reflect neoliberal ideology. It also suggests that social thought today is a long way off from understanding the roles of sensuality in the pursuit of the good life, or for that matter the enjoyment of food.     

Barroom aggression in Hoboken, New Jersey: don't blame the bouncers!

Relying on a structured observation guide listing a large number of variables shown to be good predictors of aggression in bars by past researchers, trained observers spent a total of 444 hours collecting data in 25 licensed drinking establishments in Hoboken, New Jersey. Observations took place at two separate time periods, 7:30pm-10:30pm and 11:00pm-2:00am, on Thursday, Friday, and Saturday nights. Logistic regression analyses revealed the absence of bouncers and doormen as the strongest predictor of aggression in Hoboken barrooms. This is a particularly important finding considering the frequency with which bouncers and doormen are vilified in the available research on barroom aggression. Several practical prevention strategies aimed at reducing aggression in bars are proposed.     

Message and price components of Family Caps: experimental evidence from New Jersey

In this paper, we examine the relative efficacy of two mechanisms--price consideration and the message of social responsibility--in accounting for Family Cap effects on fertility behavior. The Family Cap is a component of welfare reform policy that denies additional cash benefits to children born 10 or more months after a woman entered the welfare rolls. We use data from the New Jersey Family Development Program (FDP) evaluation that employed a classical experimental design. We find that fertility behaviors are influenced by both Family Cap price and message mechanisms but that these effects are conditioned by welfare recipients' time on welfare and race. Black women who have longer stays on welfare are more likely to be influenced by price while women with shorter stays are influenced by both price and the social message. We believe our results have implications not only for future public welfare policy initiatives but for any social policies that attempt to influence behavior directly, through individual rewards and punishments, and indirectly through the activation of social or community pressures.     

Residential segregation of West Indians in the New York/New Jersey metropolitan area: the roles of race and ethnicity

"To assess the relative roles of race and ethnicity in shaping patterns of residential segregation, this article utilizes indices of segregation and a geographic mapping strategy to examine the residential patterns of West Indian blacks in the greater New York City area. The socioeconomic characteristics of neighborhoods occupied by West Indian blacks are also examined and compared to those of areas occupied by African Americans. The results indicate that, on one hand, West Indians are largely denied access to residential areas occupied predominantly by whites and are confined to areas of large black concentrations. On the other hand, West Indians appear to have carved out somewhat separate residential enclaves within these largely black areas...."     

The body natural and the body unnatural: Beauty work and aging

This paper examines older women's perceptions of natural and unnatural aging in relation to the use of beauty work interventions, including anti-wrinkle creams, cosmetics, hair dyes, cosmetic surgeries, and non-surgical cosmetic procedures. The data are drawn from in-depth interviews with 44 women aged 50 to 70. The women tended to define natural aging as a lack of beauty work intervention and argued that this was a commendable goal. However, the majority engaged in beauty work and many articulated the importance of producing a ‘natural look’ through their beauty practices. While some women argued for an acceptance of the physical realities of growing older, others asserted that an aged appearance should be fought against using whatever beauty work interventions were required and available. We discuss the meanings that the women attribute to natural and unnatural aging in relation to the literature concerning ageism, the body, cosmetic surgery, nature, and technology.