View Single Post
  #33  
Old 03-17-2006, 03:16 PM
kipin kipin is offline
Senior Member
 
Join Date: May 2004
Location: Supporting Ron Paul
Posts: 6,556
Default Re: help me do my HW (whether min. wage should be raised)

[ QUOTE ]
[ QUOTE ]
a higher minimum wage would result in larger unemployment.

Minimum wage skewes the labour demand and supply curve and creates a gap which results in unemployment.

[/ QUOTE ]

Pretty much every academic study of the minimum wage has shown that this is not true. For example, NY and NJ have both raised the minimum wage and PA has not. Unemployment is not higher in NY and NJ-- in fact, it's slightly lower in the Garden State.

[/ QUOTE ]

The problem only comes into play when the minimum wage is set above market wages. If I were to guess, NY and NJ minimum wage is still below "living standards". The price floor has been set below equilibrium, so there is no effect.

Also, correct me if I am wrong, but NY and NJ have a far higher cost of living than PA.
Reply With Quote