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.
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Book Description
Editorial Reviews
Review
"Beyond covering previously sparse treatments of issues such as effects on prices, inflation, profits, and inequality, Neumark and Wascher demonstrate the overwhelming weight and 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
(Daniel Hamermesh )"Over the past 20 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
(Charles Brown )"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
"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
"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
About the Author
William L. Wascher is Senior Associate Director in the Division of Research and Statistics at the Federal Reserve Board.
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Customer Reviews
The minimum wage is the second most studied aspect of labor economics. The authors compile the 100 most important academic papers on the subject and reveal the results to the reader. They offer relevant graphs and regressions when necessary. When necessary they comment on the validity of particular papers using opposing academic papers. Neumark and Wascher try to make past research accessible to a general audience while still being directed at academics.
The problem with Minimum Wages is the rather obvious bias of the researchers. They have studied the minimum wage for 30 years. About 15 years ago Myth and Measurement seriously questioned their research. Card and Krueger even singled out two of their studies in showing statistical errors. Nuemark and Wascher conceded on some points of interest but never agreed with Card and Krueger's analysis. The entire book feels like one long rebuttal to Myth and Measurement. Nevertheless, the authors do remain fairly objective. They never misinterpret the research of opposing economists (though they do try to quickly refute key points.)
Minimum Wages is an excellent starting point for minimum wage research. However, I would suggest reading Myth and Measurement first.
Neumark and Wascher have examined the data and there is little evidence that minimum wages laws deliver their intended results. One of the most interesting findings of this book is that minimum wage laws can adversely affect long run wages and earnings. Long run effects often get left out of debates over minimum wages, so their inclusion in this book is important.
Neumark and Wascher have made an important contribution with this book. All those interested in the minimum wage issue should start by reading this book.
