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Casey B. Mulligan's avatar

Here we worked out the competitive case formally but when we revise it should cite mccloskey https://www.nber.org/papers/w22305

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Brian Albrecht's avatar

Great paper. When I gave a talk at Clemson, I told Kevin that I've wanted to incorporate the hedonic eliminate and your insights to expand on and respond to this paper http://web.stanford.edu/~mohamwad/Inequality.pdf

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RCooper's avatar

Thanks for this excellent overview! It's now part of my toolkit on minimum wage. (I found my way here from Don Boudreaux's link.)

I used to tell my children, when we talked about incentives, that this is what a minimum wage often looks like: https://www.forbes.com/sites/edrensi/2018/07/11/mcdonalds-says-goodbye-cashiers-hello-kiosks/

Those companies with larger numbers of options for change at the margin will actively reduce their wage costs, partly to reduce costs and partly to reduce exposure to the increasing-cost effects of ongoing political interference.

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Joe Potts's avatar

"the example is desired"? "the example is DESIGNED"? (See article above.)

SOMEONE isn't checking their speech-to-text results. MEANTIME, I'm having a hard enough time following challenging arguments and explanations ...

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Brian Albrecht's avatar

Thanks for catching after all these years!

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Fred Williams's avatar

Besides the possibility of job loses, government unions base their contracts on the minimum wage, which means the government will be spending more tax dollars. Another thing that is not being mentioned is that the companies paying these high wages will adjust their prices higher to offset the new wages, meaning everyone including those making minimum wage will pay more.

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Jan 22, 2021
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Brian Albrecht's avatar

As others have pointed out, it's possible for a decrease in hours to be welfare increasing or decreasing. If total income decreases, it's easy to have a welfare decrease. But it could go the other way. For sure.

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Fred Williams's avatar

One possible downside is if your hours are reduced, so you are not a full-time employee you could lose benefits.

Another is the company may put off hiring additional people making it harder for you to take time off.

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Joe Davis's avatar

One concern would be that your employer would expect you to be just as productive during those fewer hours worked; so it's possible you would enjoy your job far less during those hours. I'm thinking back to how much down time I had in my high school retail days.

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FletchforFreedom's avatar

Start with the UW research, the disemployment effect always offsets the gains experienced by a few:

https://evans.uw.edu/wp-content/uploads/files/w23532_0.pdf

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