Another Look at the Economics of Minimum Wage Legislation

In: The Australian economic review, Band 47, Heft 3, S. 409-415

Abstract

AbstractEconomists have long been involved in public policy‐making, both as policy advisors and policy advocates. This article revisits the two questions that future Nobel Prize winner, George Stigler, posed to the economics profession in his seminal 1946 American Economic Review article urging us to speak out in the debate over the efficacy of increases in the minimum wage: (i) 'Does such legislation diminish poverty?'; and (ii) 'Are there efficient alternatives?'. I review this literature in the United States in the context of the Congressional Budget Office's answers in 2014 to these questions and what Australian policy‐makers can learn from them.