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Minimum Wage, Labor Equilibrium, and the Productivity Horizon: A Visual Examination

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  • John R. Moser

Abstract

In this paper, I present a visual representation of the relationship between mean hourly total compensation divided by per-capita GDP, hours worked per capita, and the labor share, and show the represented labor equilibrium equation is the definition of the labor share. I also present visual examination of the productivity horizon and wage compression, and use these to show the relationship between productivity, available employment per capita, and minimum wage. From this I argue that wages are measured in relation to per-capita GDP, and that minimum wage controls income inequality and productivity growth.

Suggested Citation

  • John R. Moser, 2020. "Minimum Wage, Labor Equilibrium, and the Productivity Horizon: A Visual Examination," Papers 2010.14669, arXiv.org, revised Dec 2020.
    • Handle: RePEc:arx:papers:2010.14669
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    References listed on IDEAS

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    1. Arindrajit Dube, 2019. "Minimum Wages and the Distribution of Family Incomes," American Economic Journal: Applied Economics, American Economic Association, vol. 11(4), pages 268-304, October.
    2. Andrew Sharpe & Jean-François Arsenault & Peter Harrison, 2008. "The Relationship between Productivity and Real Wage Growth in Canada and OECD Countries, 1961-2006," CSLS Research Reports 2008-08, Centre for the Study of Living Standards.
    3. Edward M. Gramlich, 1976. "Impact of Minimum Wages on Other Wages, Employment, and Family Incomes," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(2), pages 409-462.
    4. Niklas Engbom & Christian Moser, 2022. "Earnings Inequality and the Minimum Wage: Evidence from Brazil," American Economic Review, American Economic Association, vol. 112(12), pages 3803-3847, December.
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