Here are a couple of minimum wage articles, now that we have covered the basic theory behind price controls:
1. A short article in Time (recommended by Natalie) that discusses the proposal to raise the minimum wage in Chicago. The issue of a minimum wage in a particular city raises the possibility of businesses leaving the city or locating just outside the city to avoid the regulation (a phenomenon called "voting with your feet"). Since the article is about a month old, the update is that Mayor Daley vetoed the minimum wage bill.
2. A post by Economist Alex Tabarrok that discusses some further issues on the minimum wage, taking as a given that the employment effect is small.
How do these issues complement our discussion of minimum wage in class? Any new ideas on this current debate about the minimum wage?
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These ideas stand very true to our class discussion on the minimum wage implications--a minimum wage increase will cause a surplus of workers. This said, according to Tabarrok, "a lot of people earning the minimum wage are teenagers." We discussed this in class and decided that an increase in the minimum wage will not necessarily help the plight of the working poor. I believe that there are other ways around the instituion of a minimum wage--as in these articles, municipial minimum wages might actually benefit more than just an overall, national increase. If an area feels that a "living minimum wage" needs to be instituted, this might help the local people prosper. For example, If i was to move to Los Angeles, CA from Atlanta, GA, in order to maintain my current standard of living, i would have to make a 63.24% increase in my current income of $50,000, so i would have to make $81,620.16 a year. The cost of living varies from city-to-city, so it only makes sense to enact minimum wages on the local, or municipial, level. I a national minimum wage is unnecessay as long as city government take the intiative to set some perameters on which the city can function economically.
--Alena Reich
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