We publish an intervention by inapp researcher Massimo De Minicis, labor market expert *
In policies aimed at increasing the legal minimum wage in United States at $15 an hour, in Spain up to 1000 euros per month and in Germany to 12 euros per hourthe progressive political forces in the government have acted not only in an economically sound way, but also in a culturally sound way empirically. In fact, one of the aims of setting the statutory minimum wage is to: a increase in jobs characterized by significant levels of quality that limit the bad job representing an evil that has been threatening them for years stability many western democracies.
The subject of the statutory minimum wage no longer leaves any traces of extreme skepticism among the majority economists. In fact, when analyzing labor market dynamics, many initially posit a natural balance between supply and demand. Such a view neoclassicalalso supported in part by neo-corporate economists, predicted that a higher minimum wage, set by extra-market dynamics, would inevitably erode that balance and inevitably reduce employment levels, particularly for workers with lower skills and qualifications. However, several empirical studies, particularly since the late 1980s, have failed to highlight these phenomena. An interesting and well-known analysis is, for example, that of David card (Nobel Prize in Economics) from the University of California, Berkley et al Alan Krueger Princeton University (based in part on work with Lawrence cat). Their study – reported in the book Myth and Measurement: The New Minimum Wage Economy – found that job cuts did not follow trends in the statutory minimum wage in the United States; In some cases, employment has even increased even as minimum wages have risen.
Using groundbreaking research based on counterfactual empirical methods (which analyze both those affected by wage increases and those not affected by such policies), the authors test neoclassical economic theory by combining data from a range of increases in the statutory minimum wage in different contexts and phases use increase in the minimum wage order New Jersey 1992, those of 1988 in California and those of 1990-91 at the federal level. In the various cases, a range of empirical evidence is presented showing how the increase in the minimum wage can: a Salary increase but no job cuts. The analysis also documents the impact of the statutory minimum wage on family income, on the decline of Poverty and on the Stock market valuation from low-wage employers.
Although these results have sparked heated debate, many orthodox economists see them as a violation of basic economic laws: if price increases, quantity demanded must inevitably decrease, but for various reasons minimum wage laws do not have this effect. This evidence seems to be able to relate not only to the studies conducted in the United States, but also to those conducted in the United States United Kingdom and in other contexts. If the minimum wage does not reduce employment, it can instead be deduced that large employers with low and radically contingent wage forms have an enormous market space in which to acquire, guaranteed by low labor costs high profits by crushing the competition.
Also, an interesting study by David Acemoglu shows how statutory salary caps are combined with an increase unemployment benefit they tend to curb the growth of low-skilled employment and create incentives for the creation of better jobs. A vitally important dynamic at a time when employment opportunities, particularly for the low-skilled (lack of Diploma) – which are increasingly pouring into the economy platforms or in Zero-hour contract forms – where, without external intervention, the determination of qualitatively acceptable minimum wages is practically impossible. Other economists argue about how there could be statutory minimum wages discourage you from training and other investments in worker productivity. But even in this case, an interesting analysis by Acemoglu and Pischke “The Structure of Wages and Investment in General Training” shows how oversized this concern is. If employers make a lot of money, they can easily accept minimum wage increases Fire his employees. The study also shows that when an employer has to pay higher wages to its employees, it has greater incentives to increase their wages productivity and professionalism.
In conclusion, it seems useful to emphasize that the dynamic driving more and more Western democracies in setting statutory minimum wages is not only economic but also deeply ethical. As Acemoglu and Robinson point out in The Narrow Corridor, most workers in the West no longer have to worry about the presence of brutal shapes Obligation at work, the lack of security however, she points out the existence of relationships that endanger the full development of individual freedom. Of course, the topic under discussion is not new.
One of the architects of Britain’s universalist welfare state, William Beveridge argued that “Liberty indicates a higher value of freedom from the arbitrary power of governments. It means freedom from economic bondage and want, from filth and other social evils; it means freedom from the will to power in whatever form it appears. A hungry man is not free”. Likewise Article 23 of the Universal Declaration of Human Rights of 1948 affirmed that “everyone who works has the right to just and reasonable remuneration, which ensures a decent existence for himself and his family”. From this perspective, the efforts of American Democrats and progressive coalitions in Spain and Germany to raise the statutory minimum wage can be interpreted as a more general restatement of a social policy agenda aimed at strengthening this narrow corridor towards freedom, which is a crucial one trend for western democracies.
* The views expressed in the article are personal and do not necessarily reflect those of the home institution