{"id":129926,"date":"2009-12-30T13:30:17","date_gmt":"2009-12-30T18:30:17","guid":{"rendered":"tag:business.theatlantic.com,2009:\/\/3.32782"},"modified":"2009-12-30T14:12:05","modified_gmt":"2009-12-30T19:12:05","slug":"would-reducing-the-minimum-wage-spur-employment","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/129926","title":{"rendered":"Would Reducing the Minimum Wage Spur Employment?"},"content":{"rendered":"

Casey Mulligan, writing for the New York Times’ Economix blog, pushes a theory<\/a> that’s gathering momentum: We can juice employment if we lower the minimum wage.<\/p>\n

Some would say that high real wages are part of the problem — that
\nemployers would be hiring more if labor were cheaper. If that’s right,
\npublic policy so far in this recession seems to have gone in exactly
\nthe wrong direction by raising the minimum wage<\/a> and otherwise increasing <\/a>employment costs<\/a>.<\/p><\/blockquote>\n

The Wonk Room’s<\/a>
\nobjection is simple: The current minimum wage already supports a nearly
\nunliveable salary of only $16,000. Paul Krugman’s objection traces the
\nimpact of broadly lower wages: Lower wages means a lower overall price
\nlevel, which juices demand but also raises the real value of debt. Tyler Cowen pushes back<\/a>.<\/p>\n

I’m of two minds here. On the one hand, we want to make it as easy and
\ndesirable as possible for employers to hire, and a minimum wage is a
\nmarginal barrier to cheap hires. There are certainly some<\/i>
\npeople collecting unemployment benefits from the government that would,
\nwith a lower minimum wage, get scooped up in the private sector. At the
\nsame time, my sense is that a lower minimum wage might not contribute
\nmeaningfully to employment or aggregate demand. When I imagine myself
\nas an struggling employer with a X dollars in compensation that I split
\nbetween Y workers, some of which are paid at the minimum wage, a lower
\nMW might encourage me to reduce X, the compensation pool, rather than
\nY, the number of workers. After all, times is tough, and I’m still not convinced that aggregate demand will support a sustainable recovery. The opportunity to reduce the compensation pool would essentially be a short- and
\nlong-term transfer of wealth from employees to employers, which would
\nhurt aggregate demand.<\/p>\n

In short, I think the effects of reducing the minimum wage would be mixed, and I prefer other job-spurring ideas<\/a>.


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Casey Mulligan, writing for the New York Times’ Economix blog, pushes a theory that’s gathering momentum: We can juice employment if we lower the minimum wage. Some would say that high real wages are part of the problem — that employers would be hiring more if labor were cheaper. If that’s right, public policy so […]<\/p>\n","protected":false},"author":1534,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-129926","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/129926","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1534"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=129926"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/129926\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=129926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=129926"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=129926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}