Minimum wages exist in more than one hundred countries, both industrialized and developing. The United States passed a federal minimum wage law in 1938 and has increased the minimum wage and its coverage at irregular intervals ever since; in addition, as of the beginning of 2008, thirty-two states and the District of Columbia had established a minimum wage higher than the federal level, and numerous other local jurisdictions had in place "living wage" laws. Over the years, the minimum wage has been popular with the public, controversial in the political arena, and the subject of vigorous debate among economists over its costs and benefits.
In this book, David Neumark and William Wascher offer a comprehensive overview of the evidence on the economic effects of minimum wages. Synthesizing nearly two decades of their own research and reviewing other research that touches on the same questions, Neumark and Wascher discuss the effects of minimum wages on employment and hours, the acquisition of skills, the wage and income distributions, longer-term labor market outcomes, prices, and the aggregate economy. Arguing that the usual focus on employment effects is too limiting, they present a broader, empirically based inquiry that will better inform policymakers about the costs and benefits of the minimum wage.
Based on their comprehensive reading of the evidence, Neumark and Wascher argue that minimum wages do not achieve the main goals set forth by their supporters. They reduce employment opportunities for less-skilled workers and tend to reduce their earnings; they are not an effective means of reducing poverty; and they appear to have adverse longer-term effects on wages and earnings, in part by reducing the acquisition of human capital. The authors argue that policymakers should instead look for other tools to raise the wages of low-skill workers and to provide poor families with an acceptable standard of living.
About the Authors
David Neumark is Professor of Economics at the University of California, Irvine. He is also a Research Associate at the National Bureau of Economic Research, a Senior Fellow at the Public Policy Institute of California, and a Research Fellow at the Institute for the Study of Labor.
William L. Wascher is Senior Associate Director in the Division of Research and Statistics at the Federal Reserve Board.
"This is a superb book, notable for both breadth and depth of coverage, on one of the most fundamental topics in economics ... Summing Up: Essential. Economics collections, upper-division undergraduate through professional.", J. P. Jacobsen, Wesleyan University,, Choice
"Beyond covering previously sparsely treated issues such as effects on prices, inflation, profits, and inequality, Neumark and Wascher demonstrate the overwhelming weight of careful U.S. evidence and other evidence showing the detrimental effects of minimum wages on low-skilled workers. The volume is a must for anyone interested in research on labor markets."
Daniel S. Hamermesh, Centennial Professor of Economics, University of Texas at Austin
"Neumark and Wascher provide what will be the post-Card and Kreuger consensus on the new economics of the minimum wage. Minimum Wages is an extraordinary synthesis of the new empirical literature on the employment and distributional consequences of minimum wage legislation. It is an A to Z review of the history of minimum wage legislation, the motives of supporters and opponents, and how such laws affect all of us."
Richard V. Burkhauser, Sarah Gibson Blanding Professor of Policy Analysis, Cornell University
"Over the past twenty years, the focus of research on the minimum wage has changed from federal to state minimum wages as the key policy variable, and from effects on teen employment to a broader range of outcomes. David Neumark and William Wascher have been important contributors to these innovations. Minimum Wages combines a very accessible summary of their research with helpful discussions of others' work."
Charles Brown, Professor of Economics, University of Michigan
Choice Outstanding Academic Title, 2009.