tag:blogger.com,1999:blog-1331441403058020963.post1624991253879328574..comments2024-03-28T06:49:24.930-04:00Comments on International Political Economy at the University of North Carolina: Minimum Wage 101Thomas Oatleyhttp://www.blogger.com/profile/14092437150746625670noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1331441403058020963.post-24660475062250231352011-07-08T16:41:09.867-04:002011-07-08T16:41:09.867-04:00Right, my point was that the effect of a minimum w...Right, my point was that the effect of a minimum wage increase will depend on many other factors. It's not pre-determined. In a monopsony situation, it's like setting a floor below a competitive equilibrium -- since a monopsony market isn't competitive -- and wages can go up while employment rates are unaffected. <br /><br />So the discussion needs to be about what those other factors look like. I doubt monopsony describes the situation very well, since many of the jobs we're talking about are in retail or other low-end services, and those markets are pretty competitive. Monopsony is a pretty special, and relatively rare, case. But maybe it does... high corporate profits may provide some evidence that there is monopsony-lite going on. Of course if the markets are uncompetitive we should do things to make them more competitive rather than entrench the uncompetitiveness by hiking the minimum wage. <br /><br />I think the payroll tax holiday was intended to stimulate both the demand and supply side, but there were definitely a lot of people making the case that a tax holiday would boost employment, and they were using the same logic that operates here.Kindred Winecoffhttps://www.blogger.com/profile/14330671232391851377noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-36934921440418058032011-07-08T16:30:07.632-04:002011-07-08T16:30:07.632-04:00this is all a bit too 101ish for me. I don't t...this is all a bit too 101ish for me. I don't think it's that unreasonable to claim that labor demand in many sectors with MW jobs is de-facto monopsonistic - which of course provides a theoretical explanation of how a minimum wage can both lift wages and not affect employment. (I believe there is a study that shows that empirically shows MW increases eat mainly into corporate profits, which would fit with the monopsony claim - something from Texas, but I can't find it atm.) <br /><br />It would also be fair to argue that with slightly higher wage jobs with higher skills, demand is less monopsonistic, so that the same logic needn't apply and a payroll holiday could help. That said, the payroll holiday as I understand it was supposedly designed more as a demand stimulus measure - giving money to consumers likely to spend it soon - than as a labor supply measure.Latinamericanisthttps://www.blogger.com/profile/10088329371056600460noreply@blogger.com