Drowning the poor in excessive wages: the problems of the minimum wage law
Purpose – The purpose of this paper is to demonstrate that the minimum wage law is deleterious to the unskilled, to the young and to members of minority groups. Design/methodology/approach – The main method used in this paper is the logical application of basic supply and demand economic analysis. Findings – The authors found that when a minimum wage of any given level is imposed, those with productivities below that level are at great risk of unemployment. For example, with a minimum wage of $10 per hour, those who can only produce at the rate of $1-$7, $8, or $9 per hour are likely to become unemployed. Similarly, if the level is raised to, say, $100, then even people with productivity levels of $8 or $90 per hour will lose their jobs. Research limitations/implications – More effort should be made to ascertain who it is that gains from this law, if it is not the poor and unskilled. Attention should be focused on labor unions in this regard. Practical implications – The practical implication of this research is that the minimum wage should be repealed. Social implications – Present public attitudes, however, overwhelmingly support this legislative enactment. But this is based on economic illiteracy. The public needs to be educated in basic economics. Originality/value – This paper, if its implications are implemented, will have great value for all those who wish the unemployment rate to be radically reduced.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 28 (2012)
Issue (Month): 4 (November)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://www.emeraldinsight.com/h.htm Email:
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Freeman, Richard B, 1996. "The Minimum Wage as a Redistributive Tool," Economic Journal, Royal Economic Society, vol. 106(436), pages 639-49, May.
- repec:sae:ilrrev:v:49:y:1996:i:3:p:547-552 is not listed on IDEAS
- Finis Welch, 1977. "What Have We Learned from Empirical Studies of Unemployment Insurance?," ILR Review, Cornell University, ILR School, vol. 30(4), pages 451-461, July.
- David Neumark & William Wascher, 1992. "Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws," ILR Review, Cornell University, ILR School, vol. 46(1), pages 55-81, October.
- Daniel B. Klein & Stewart Dompe, 2007. "Reasons for Supporting the Minimum Wage: Asking Signatories of the "Raise the Minimum Wage" Statement," Econ Journal Watch, Econ Journal Watch, vol. 4(1), pages 125-167, January.
When requesting a correction, please mention this item's handle: RePEc:eme:humpps:v:28:y:2012:i:4:p:258-269. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.