[PEN-L:4606] Re: Card & Krueger

[dhenwood@xxxxxxxxx (Doug Henwood)]

Proponents of the job-killing theory of the minimum wage make fairly modest
claims, even if we take them at face value. The classic line is that a 10%
increase in the MW results in a 2-3% reduction in employment. So even a 25%
increase, which is much larger than anyone talks about, would still leave
about 93% of the MW universe significantly better off than before.

A complicating factor is that the MW is often raised late in a business
cycle, just before a cyclical drop in employment (late 60s, mid-70s,
1979/80, 1990/91; New Jersey & Calif just as their regional economies were
ending a period of outperforming the national average). So with that
confounding factor, the anti-MW forces' claims have to be treated as pretty
insignificant.

Doug

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Doug Henwood
[dhenwood@xxxxxxxxx]
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