[PEN-L:6841] Re: Min Wage editorial

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

This argument was at the core of my book:
The Pathology of the U.S. Economy: The Costs of a Low Wage System (NY and
London: St. Martin's and Macmillan, 1993).

>
> Eric, Your dynamic efficiency type argument has been around in the Oz
> literature. It has been applied to the argument as to whether a
> centralized wage fixing system is more efficient than a decentralised
> one.
> Higher (minimum) wages may also promote higher physical capital
> investment and higher labour productivity. Such government intervention
> breaks the vicious cycle of low wages and  low productivity, and hence
> static allocative inefficiency (to use some n/c jargon!).
> Martin
>
> --
> Martin Watts			Email: ecmjw@xxxxxxxxxxxxxxxxxxx
> Department of Economics		Office: (61) 49 215069 (Phone)
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>


--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 916-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx