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Labor Markets, Unemployment, and Minimum Wages: A New View

Author

Listed:
  • Thomas I. Palley

    (New School for Social Research)

Abstract

This paper presents an alternative macroeconomic framework for understanding labor markets and unemployment. The approach breaks with the standard model which maintains that unemployment is the result of high and rigid wages, and instead focuses on the structural characteristics of labor exchange. Unemployment can arise even if wages are flexible and labor markets competitive. This is because the wage rate is used to determine the level of hours rather than clear the jobs market. Minimum wages can actually increase employment as measured by jobs.

Suggested Citation

  • Thomas I. Palley, 1995. "Labor Markets, Unemployment, and Minimum Wages: A New View," Eastern Economic Journal, Eastern Economic Association, vol. 21(3), pages 319-326, Summer.
    • Handle: RePEc:eej:eeconj:v:21:y:1995:i:3:p:319-326
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume21/V21N3P319_326.pdf
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    Citations

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    Cited by:

    1. Chung-Cheng Lin, 2002. "The Shortage of Registered Nurses in Monopsony: A New View from Efficiency Wage and Job-Hour Models," The American Economist, Sage Publications, vol. 46(1), pages 29-35, March.
    2. Chung-cheng Lin, 2001. "A Comment on "Labor Markets, Unemployment, and Minimum Wages: A New View."," Eastern Economic Journal, Eastern Economic Association, vol. 27(1), pages 71-82, Winter.

    More about this item

    Keywords

    Macroeconomics; Unemployment; Wage;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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