Jeffrey Clemens, Michael Wither, Wednesday, January 14, 2015 - 00:00
Coen Teulings, Sunday, June 15, 2014 - 00:00
Income inequality has increased worldwide in recent years. This column discusses the role of technological progress, globalisation, and the liberalisation of labour-market institutions in this growing inequality. The liberalisation of labour market institutions has made labour markets more flexible and created many jobs. But beyond a certain point, the net effect of further liberalisation might be negative for society.
Yi Huang, Prakash Loungani, Gewei Wang, Friday, May 16, 2014 - 00:00
Minimum wages are set to increase in China under the country’s latest five-year plan. This column documents that past increases led to lower employment. However, the impact is heterogeneous. Firms with high average wages or large profit margins actually increase employment, while those with low average wages or small profit margins downsize.
Pierre Brochu, David A Green, Wednesday, January 22, 2014 - 00:00
Economic research finds little evidence in support of the hypothesis that an increase in minimum wages significantly affects employment – either positively or negatively. This column discusses a study of the impact of minimum-wage changes on turnover rates. Minimum-wage increases are associated with a lower probability that a job will end, and with a lower probability that an unemployed person will find work. The former effect is established only for newly hired workers. Increases in the minimum wages are also associated with more stable jobs for all low educated workers. Thus, the trade-off between fewer jobs with higher wages and more job stability versus easier access to jobs should be taken into account in the minimum-wage policy debates.
Jonathan Meer, Jeremy West, Tuesday, September 10, 2013 - 00:00
The recent proposal by President Obama to raise the federal minimum wage has brought this issue back into the limelight. This column presents new research suggesting minimum-wage policies may not cause an immediate shock to employment, as is often feared, but do cause a reduction in the rate of net job growth. The long-run prospects for individuals are damaged, as they are delayed the opportunity to develop skills and work experience – that crucial first rung on the career ladder.
Daniel Aaronson, Eric French, Wednesday, March 6, 2013 - 00:00
How are spending, income and debt affected by minimum-wage hikes? This column argues that putting money into the hands of consumers, especially low-income consumers, ultimately leads to predictable increases in spending. Evidence suggests that a $1 wage hike increases household spending by minimum-wage workers – usually in the form of collateralised debt – by around $700 per quarter.
Michael Burda, Monday, January 28, 2008 - 00:00
German discussion of economic policy is appallingly demagogic. Neglect of economic reasoning has resulted in the threat of a maximum wage and passage of a minimum wage that will cost thousands of jobs.