What Is the Minimum Wage?
The first US federal rate was 25 cents an hour in 1938; since July 2009 the federal rate has been 7.25 dollars.
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1.What is a minimum wage?
The first US federal rate was 25 cents an hour in 1938; since July 2009 the federal rate has been 7.25 dollars.
2.What does the simple textbook model predict about a price floor above the market wage?
Whether it shows up in real data is a separate question.
3.A bakery has three workers at 8 dollars an hour. A floor of 10 lifts the wage bill from 24 to what?
Leo can cut hours, raise prices, accept lower profit or hire fewer people; the data decide which he picks.
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Sources (6)
- Chart of the Federal Minimum Wage Rates under the Fair Labor Standards Act (US Department of Labor, Wage and Hour Division)
- Card, D. and Krueger, A. B., Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania (NBER Working Paper 4509, October 1993; AER 84(4), 1994)
- Neumark, D. and Wascher, W., The Effect of New Jersey's Minimum Wage Increase on Fast-Food Employment: A Re-Evaluation Using Payroll Records (NBER Working Paper 5224, August 1995)
- Cengiz, D., Dube, A., Lindner, A., Zipperer, B., The Effect of Minimum Wages on Low-Wage Jobs (NBER Working Paper 25434, January 2019; Quarterly Journal of Economics 134(3), 2019)
- Neumark, D. and Wascher, W., Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research (NBER Working Paper 12663, November 2006, rev. January 2007)
- Eigene Rechnungen: Baeckerei
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