- Capitalism and Alternatives -
minimum wages - sleight of hand
In Reply to: Studies?.....2nd take-corrected) posted by bill on March 31, 1999 at 12:27:50:
What the interesting Levy study (i wont rubbish it, it is relavent - although its a surbey of opinions not actual effects) shows is that small businesses wont sack people because of a smsll increase in labor cost. It doesnt refute the earlier studies mentioned (thats mostly where I get it from) but does point out that demand is less elastic than assumed. In other words raising minimum wages a little bit doesnt result in mass unemployment, although it still has the effect of raising costs, prices and inhibiting hiring accross the board. Infact this last point is put forth by the Levy study, that bigger increases stop even small companies from hiring extra staff - which is not the intention (I hope) of minimum wage laws.