▲ | Natsu 5 days ago | |
> Card & Kruger (1994) was a null result paper showing that increasing the minimum wage has a null effect on employment rates. This result went against the common assumption that increasing wages will decrease employment at the time. I had to look that up, because more precisely, it showed that a particular minimum wage increase in NJ from $4.25 to $5.05 didn't increase unemployment in 410 particular fast food joints in 1989-1990 - https://davidcard.berkeley.edu/papers/njmin-aer.pdf - not that "increasing the minimum wage has a null effect on employment rates" at all, ever, no matter what. It's not as if increasing the minimum wage to something impossible to afford like $100 trillion wouldn't force everyone to get laid off, but nobody generally cares about the limiting case like that, as that's relatively unlikely. The interesting part is non-linearity in the response, seeing where and how much employment rates might change given the magnitude of a particular minimum wage increase, what sort of profit margins the affected industries have, elasticity of the demand for labor and other adaptations by businesses in response to increases, not whether it's a thing that can happen at all. And we're seeing a lot more such adaptions these days. There are McDonalds around here that have computers in the lobby where you input your order yourself and I've gotten drones to deliver my food instead of DoorDash drivers. That kind of thing was not yet practical back in 1989, when I remember using an Apple ][ GS and it's not clear that findings like this should be relied upon too heavily given that some of the adaptations available to businesses now were not practical back then, especially when technology may change that even more in the future. |