Talk:Minimum wage

Laws and principles

I propose to spin-off the first two sections into Minimum wage law or List of minimum wage laws. Anyway, the 'cost and benefits' section should come before the 'debate' section.

Whether the noble aims of social justice, a living wage and a guaranteed minimum income will be advanced by such laws, or the result is just increased unemployment and reducted upward mobility, is debatable. (That's why there's a 'debate' section.) I don't think we should try to settle the argument by saying what "most economists" believe. Anything less than 95% agreement in science indicates a significant degree of uncertainty. --Uncle Ed 21:01, 8 February 2007 (UTC)

I like the idea of spinning the list of minimum wage laws into a different article, as the ginormous list is beginning to take this article over. On the view of economists, I don't think the point is to say X is true, but to describe the structure of the debate, what the significant viewpoints and who is behind them. -- Mgunn 21:09, 8 February 2007 (UTC)

I never knew one agreeance constituted a consensus. ~ UBeR 02:46, 9 February 2007 (UTC)

I emphatically agree with moving the costs benefits section to the debates section.

Registering my Objection to a comment in edit history

I don't think the Fuller text needs to repeated, so I'm not going to revert, but I am going to register my objection to Divinus's characterization of the Fuller article in the American Economic Review as not a scholarly article and instead "a professional organisation article." This is wacky and wrong. The American Economic Review is a scholarly journal. I hope this was just an off the cuff mistake and not a sign of gross unfamiliarity with the topic of economics and academic research in general. -- Mgunn 05:00, 10 February 2007 (UTC)

I think the main rejection is that the study has already been discussed elsewhere in the article. ~ UBeR 06:23, 10 February 2007 (UTC)

I agree with the redundant objection which is why I didn't revert again. -- Mgunn 11:56, 10 February 2007 (UTC)

Luxembourg

Should there be a mention of Luxembourg? It has the highest minimum wage in the world, yet the unemployment rate is a mere 4.1%, less than that of the US (40th of 198 lowest). Moreover, a whopping 18% of the population earns minimum wage, which should emphasise the correlation between minimum wage and unemployment.Divinus 10:15, 11 February 2007 (UTC)

If we mention it, let's make it clear that this is an anecdote (and let's verify the figures). There are two serious issues here. (1) The level of the minimum wage, itself, is meaningless. What matters is the level of the minimum wage relative to the average hourly wage rate. For example, a country with a minimum wage of $1 and an average hourly wage of $2 has a higher effective minimum wage (with respect to the effect on unemployment) than a country with a minimum wage of $10 and an average hourly wage of $100. (2) The relationship between the minimum wage and unemployment is subject to noise. Therefore, a single observation (i.e. Luxembourg) neither supports nor refutes the theory. What's needed is a set of data -- either time series (as shown in the graphs we currently have) or cross-sectional (i.e., including lots of countries). Wikiant 15:54, 11 February 2007 (UTC)

I agree with most of what you said Wikiant, but I'm going to slightly disagree with "what matters is the level of the minimum wage relative to the average hourly wage rate." It's the relationship between the minimum wage and a specific worker's marginal productivity. If the minimum wage (including benefits) rises above a worker's marginal productivity, that worker will lose his/her job because the worker costs more to employ than he/she benefits the business. Just to pick an extreme example, a minimum wage of $40/hour would do nothing for doctors, because a doctor's marginal productivity is going to be far above $40/hour. On the other hand, an enforced minimum wage of $40/hour would likely eliminate employment in the fast food industry (and potentially the industry itself) because a kid flipping burgers isn't generating $40/hour in value for the business. Over time, wages and productivity track each other.

Mgunn, I agree with you. I was commenting more from an empirical and aggregate perspective. What you are describing is the underlying dynamic that drives what I'm claiming folk will tend to see empirically. For myself, I try to avoid the economic arguments in favor of the empirical arguments assuming that 99% of the people reading this article will be non-economists. Wikiant 19:01, 11 February 2007 (UTC)

According to 2004 data, Luxemburg's minimum wage was 43.4% of the average wage, about normal. Highest in Europe was Malta (56.4%), and lowest Portugal (34.5%).210.176.69.125 06:32, 11 September 2007 (UTC)DOR Sept 11, 2007

What's the link to high average wages? It's evidence you're in an environment with high levels of productivity because wages and productivity track each other. A $6 minimum wage is going to do less harm in downtown Manhattan than it's going to do in rural Arkansas because even basic unskilled manual labor is going to be valued higher in downtown Manhattan. Luxembourg is a tiny, rich principality with a robust banking sector and probably has few workers that are less productive than the minimum wage. Interestingly, it appears that Luxembourg has a lower minimum wage for workers under 18. This would reduce the harm of a minimum wage because younger workers are going to be less skilled and have lower productivity. Reducing the minimum wage would lower unemployment even further.

Also, it's worth noting that Luxembourg has low tax rates and remarkably free market policies by European standards. I actually met the Prince of Luxembourg once, and I found him to be very impressive. He explained how Luxembourg was doing quite well because it was essentially forced to have low tax rates and a favorable business climate. Companies don't HAVE to be in Luxembourg and if tax rates get high, they can quickly move away. Because the country is so small, these movements are quickly felt. Luxembourg's small size impacts tax rates in another ways as well. For example, if a legislator wants to raise taxes, he has to explain to his neighbors why his tax rates need to go up! -- Mgunn 17:01, 11 February 2007 (UTC)

Also what does "yet the unemployment rate is a mere 4.1%" really mean? Are 95.9% of its population actually employed (not likely). Or does it mean that only one person is actively looking for work for each 24 who are working? How many are discouraged to the point that they do not look? JRSpriggs 08:57, 12 February 2007 (UTC)

The unemployment rate is calculated as the percent of the people not working, but looking for work, in the labor force. You'll have to find out who exactly is considered in the in the labor force for Luxembourg, but in the U.S. it's 16 years of age and looking for employment. Discouraged people are typically not counted in the labor force. ~ UBeR 17:22, 12 February 2007 (UTC)

EITC

Economist critics of the minimum wage wouldn't call the EITC a "viable alternative" because this implies indifference between the two policies. Nothing is further from the truth. In a recent opinion piece, Nobel Prize winning economist Gary Becker wrote, "The strong bipartisan support for increasing the federal minimum wage to $7.25 an hour from the current $5.15 -- a 40% increase -- is a sad example of how interest-group politics and the public's ignorance of economics can combine to give us laws that manage to be both inefficient and inegalitarian." And later when discussing the EITC, "As a means of raising people from poverty or near poverty, the minimum wage is inferior to the Earned Income Tax Credit, which compensates for low wages without interfering with the labor market or conferring windfalls on the nonpoor." -- Mgunn 01:19, 13 February 2007 (UTC)

I don't think it implies indifference, but whatever floats your boat. I thought the previous version was not NPOV, however, as if it were saying the EITC was a cureall. ~ UBeR 02:10, 13 February 2007 (UTC)

I agree it isn't a cureall. You don't have direct labor market distortions, but you do have distortions from generally higher tax rates. (Deadweight loss proportional to the square of the tax rate yadda yadda yadda.) -- Mgunn 09:32, 13 February 2007 (UTC)

No Graph?

Seeing as there is no graph to help explain the minimum wage and its effects on employment, what would you guys think of this simplified textbook model:?

~ UBeR 01:50, 13 February 2007 (UTC)

I believe it is a good idea to include a graph showing the theory behind the claim. Wikiant 02:48, 13 February 2007 (UTC)

Looks good to me. Just an idea, you might also want to wikilink to supply and demand in the explanation of the graph so people unfamiliar reading these types of graphs have some help if they want to get into it. You might want to have the supply curve a different color from the demand curve. Then you could say something in the text or possibly in the caption like:

The blue line shows the supply of labor at various wages and the green line shows the demand for labor at various wages. The intersection of these two lines is the equilibrium point. At this point, the supply of labor matches the demand for labor. As the graph shows in this simple model, setting a minimum wage above the equilibrium wage induces workers to offer more labor and employers to demand less labor, leading to higher unemployment. -- Mgunn 09:52, 13 February 2007 (UTC)

In the interest of making the graph as clear as possible, I'd make the D and S curves solid and the rest of the lines dashed. Wikiant 14:32, 15 February 2007 (UTC)

Yeah I can do that, and use different colors for the lines too, if need be. I can also make a more detailed graph (i.e. add D₁ > S₁ = unemployment and D₁ - S₁ = unemployed), if need be. ~ UBeR 18:46, 15 February 2007 (UTC)

This would be great coupled with a graph showing the effects of the minimum wage on employment in monopsony conditions to be fair, in which a minimum wage hike might have no effect or even a positive effect on employment. Anyone know how to do this? JohnC

Even if there were only one employer, the demand for labor would be a downward sloping curve due to the law of diminishing returns. Thus the minimum wage will ALWAYS reduce employment, i.e. monopsony would not change the situation. JRSpriggs 09:05, 18 February 2007 (UTC)

Actually, in cases of monopsony, this is not true. Even in a regular market, it sometimes incorrect to assume the supply curve is always upward sloping. ~ UBeR 23:24, 18 February 2007 (UTC)

To UBeR: When was the law of diminishing returns repealed? The marginal utility of each man-hour consumed by a business is less than the previous one because it would otherwise have been used for what the other one was used for. (Except for small fluctuations due to the two-eggs needed to bake a cake effect.) Also the marginal dis-utility of paying a dollar in wages increases as the expenditure increases, which also tends to the same effect. How can you doubt this law of economics? JRSpriggs 05:54, 19 February 2007 (UTC)

Monopsony. ~ UBeR 18:43, 20 February 2007 (UTC)

Graph looks good, I would agree that it should be included. Under the theory section of course.Burkander 18:36, 8 March 2007 (UTC)

I clenaed it up differentiating colors for the supply and demand, converting them into areas and other aesthetical modifications; removed request for image

File:Wage labour.jpg

Yupi666 08:10, 15 June 2007 (UTC)

By the way, one thing I was meaning to do but never did was changing the x-axis label from "employment" to "labor," because we're talking about the supply and demand of labor. ~ UBeR 19:41, 24 June 2007 (UTC)

A minor correction is needed to the graph. The unemployment bracket on the x-axis is incorrect; the correct change of employment is from the old equilibrium (the red line) to the new equilibrium (the gray line at left). Consulting any microeconomics textbook would allow you to verify this & possibly put in some dead-weight loss, lost wages, gained wages & so on that might make the graph more instructive. Hope this helps. User:pab 17:13, 14 August 2007 (UTC)

Unemployment is the surplus of labor -- i.e., quantity supplied of labor less quantity demanded. This is what the graph shows. You are correct that the *change in employment* is the difference between the old equilibrium and the lesser of Qd and Qs under the minimum wage. However, the change in employment is not the same as the unemployment. Wikiant 01:34, 15 August 2007 (UTC)

The Minimum Wage as a Social Security Issue

The minimum age question is especially hurting in Brazil, whose problems arise mostly from the fact that the social security system must pay at least R$ 300,00 monthly (which is the same as the minimum wage for active workers). As the population grow decreases (from 2.5% yearly in the sixties to about 1.5% now) the percentage of elderly people in need of social security soars, pressing on the INSS budget. When the system was created there was a 6:1 relation between active and retired workers, which is now at 3.5:1 and decreasing. Social security deficit is of about 40% and needs to be paid by the Treasury, which reduces the country's ability to invest on infrastructure, education, health-care, etc. Despite this dire situation, nobody wants to discuss the issue in either way: disconnecting social security from the minimum wage or else changing retirement rules. Only time will tell whether this will be solved or else Brazil must go bankrupt first before people will accept discuss the matter maturely. jggouvea 19:17, 17 February 2007 (UTC)

Notice that new sections of talk are supp

osed to be

added to the bottom of the page. So I moved this one down. JRSpriggs 09:15, 18 February 2007 (UTC)

This really has little to do with the Mimimum Wage. I understand you say Social Security benefits are pegged to minimum wage, but the problem is in the pay-as-you-go system and changes in demography. When you speak of decoupling it from minimum wage, you're talking about reducing social security benefits, which has nothing to do with the benefits of a minimum wage.Burkander 18:31, 8 March 2007 (UTC)

Sigh, Some Major Concerns

Two major concerns:

Under "costs" it reads

"Reduces economic growth by skewing factor-choice incentives away from the optimum choice" I was curious about this statement, because it's non-sensical. Skewing factor-choice incentives could make the economy less efficient, but there's no reason to believe it would hinder growth. Indeed, it would spur investment in capital, which could improve growth. Anywho, I wanted to look at the original article cited entitled "Does Regulation Affect Economic Outcomes? The Case of Dentistry." By the fir

st p art of the title it seems relevent, but the second part of course does not. I pulled up the article and found absolutely no mention of minimum wage regulation or the effect of factor-choice incentives on economic growth. If you're interested in the effect of regulation on Dentistry, I highly recommend it. For our purposes however,

I'm Deleting that line

Second major concern:

I was curious about all the graphs oddly tossed into the "Debate" section, and for no apparent reason one was thrown in the card kreuger section. At first glance they look like they're pulled off the BLS website, listed as the source on the graph. If this were the case, I'd be disappointed in the BLS. The graphs cover a short period, make no mention of other variables, and don't even list all the years. Turns out they were in fact created by Antony Davis, Ph.D., of Duquesne University.

This research is not published, it is the work of on individual (PhD notwithstanding) and therefore violate the wiki policy against posting original research, defined as "unpublished facts, arguments, concepts, statements, or theories, or any unpublished analysis or synthesis of published material, which appears to advance a position — or which, in the words of Wikipedia's co-founder Jimmy Wales, would amount to a "novel narrative or historical interpretation."

I am therefore Deleting these graphs

Burkander 18:01, 8 March 2007 (UTC)

Just Some Minor Concerns

First two paragraphs under "debate" would fit really well under the "theoretical" section.

Reason: there is no debate that in simple econ analysis price floors above equilibrium cause surpluses There is no debate that in monopsony minimum wage may not affect unemployment

I recommend they be moved.

Why does "scholarly articles" section include one book and responses to it? There have been hundreds of actual articles written on this subject.

The section "Benefits" is mostly from an EPI policy brief. I think because this organization is clearly biased. For instance, if instead of cited bullet points it were written out and attributed in the paragraph to EPI, I think that would be more honest.

The Gary Fields part, while interesting, probably belongs under either debate or scholarly articles . Come to think of it, maybe debate and scholarly articles should be combined.

"Equivilence to tax subsidy" part probably belongs under debate. Is it really published work if it's in a blog?!?

Burkander 18:24, 8 March 2007 (UTC)

I agree with most of what's been said here. On Mankiw's blog part about tax subsidies, I've been against inserting it into the article. However, Wikipedia does allow for blogs to be a reference when it is made by "well-known, professional researcher writing within his or her field of expertise." ~ UBeR 03:02, 9 March 2007 (UTC)

Culture Question

At what point is it legitimate to make a change? I see lots of room for improvement, and I agree with suggestions posted above. If someone proposes a suggestion, and no one objects, is it reasonable for me to make the changes?

E.g., I'd like to incorporate the costs benefits section into debate, as suggested above. I think I'll do that soon if no one objects.

As noted in my above entry, I deleted particularly egregious entries. —The preceding unsigned comment was added by Burkander (talk • contribs) 18:42, 8 March 2007 (UTC).

Be BOLD. ~ UBeR 03:04, 9 March 2007 (UTC)

Rapid sequence of major edits

I've reverted a rapid sequence of major edits by Burkander. I suggest that we discuss the edits first. My major issue is with characterizing the graphs as original research. The data sources listed are the actual data sources. The only thing that is original is that the data is displayed in graphic format rather than in tabular format (as displayed in the source). Wikiant 19:22, 8 March 2007 (UTC)

data sources listed where? It lists the BLS, which does not break down unemployment by age, nor does it have the minimum wage. It doesn't say whether it's real minimum wage or nominal, or whether it factors in state minimum wage.

The data have also been manipulated, so it is not just that "the data is[sic] displayed in graphic format rather than tabular." No where will you find a table that lists the ratio of unemployed 16-19 year olds as percentage of the population to unemployed 20-60 year olds as percentage of the population. Minimum wage to hourly wage is also a calculated ratio.

It combines data from multiple tables, without listing where the data are from, manipulates that data and suggests a correlation. I quote again, original research is "...unpublished ...synthesis of published material"

Burkander 20:48, 8 March 2007 (UTC)

If you look at the attribution page under "What is not original research?" you will find the following:

"Editors may make straightforward mathematical calculations or logical deductions based on fully attributed data that neither change the significance of the data nor require additional assumptions beyond what is in the source."

The graphs are simply pictoral representations of published, freely available data. Wikiant 21:13, 8 March 2007 (UTC)

I think these graphs are illustrative, and the general story they tell isn't controversial. A number of economists disagree on the magnitude of unemployment effects from the minimum wage, but from the surveys I've looked at, not too many dispute their existence. -- Mgunn 21:31, 8 March 2007 (UTC)

Do you believe that population to unemployment of 16-19 year olds to population to unemployment of 20-60 year olds is a "straightforward calculation"? Do you think that the signifigance of the unemployment to population ratio isn't changed when made part of a ratio to another unemployment to population ratio? It may well be useful, but it's useful precisely because it changes the signifigance.

I think it's worth continuing the quotation you cut off. The full text reads "Editors may make straightforward mathematical calculations or logical deductions based on fully attributed data that neither change the significance of the data nor require additional assumptions beyond what is in the source. It should be possible for any reader without specialist knowledge to understand the deductions."

To this I quote a post from your usertalk page: "Thanks for adding the graphs to the Minimum Wage article. Can you add a link that explains their significance or indicates how to read them? What type of graphs are they; what is the name of this type of graph? Jerimee 05:38, 25 November 2006 (UTC)" Also above the clarity of the graphs is questioned.

Obviously it is not possible for this reader to understand the calculations made. Non-specialists don't necessarily even appreciate what economists mean by "unemployment."

Your above comment that "Given the knowledge required to understand the subject matter of this article, I'm not sure that it's appropriate to include instructions on how to read a graph.." doesn't seem fair. Is this page for people with some prerequisite knowledge? Or is it for everyone?

I can only find teen unemployment on a monthly basis. Was the population used the annual average or the monthly? Was the unemployment averaged out for the year? This doesn't strike me as straighforward.

Burkander 21:52, 8 March 2007 (UTC)

Additionally, as Partridge and Partridge note in "Are teen unemployment rates influenced by state minimum wage laws?", the "proper minimum wage measure is in some dispute."

Yet these graphs rely on one poorly explained minimum wage measure and lead readers to conclude causation, as someone did in this discussion thread above

Burkander 22:15, 8 March 2007 (UTC)

The teen unemployment figures I show are annual. They come from the BLS, Table B-36, "Civilian employment and unemployment by sex and age, 1959–2005." If your point is that the proper minimum wage measure is in some dispute, then I would include discussion relevant to that point. To your question, "Do you believe that population to unemployment of 16-19 year olds to population to unemployment of 20-60 year olds is a 'straightforward calculation'?," I'd have to say, "yes within the context of the topic." If we eshew all complexity, then we're left with an article comprised of a single sentence: "The minimum wage is the legally imposed lower limit on wages." Of course, we then have the problem of some readers not knowing what "legally imposed lower limit" means, etc. Wikiant 23:57, 8 March 2007 (UTC)

Whether a calculation is adequately straightforward is not dependent on "the context of the topic." The test is clearly stated. It's whether any reader can understand it. If the audience for whom we write were comprised of economists we could make allowances for the complexity of the topic. Our job, however, is to convey this material to a general audience.

True, if we didn't allow any complexity this article would not be very informative. Complexity is allowed, even welcomed, but not in original research. With a topic as controversial as the Minimum Wage, it's better to rely on published material. I think the reasons for not allowing the posting of original research are valid.

We could link to "legally imposed lower limit." Where's the explanation of why the graphs use minimum wage as a percentage of the average wage? It may seem self evident to you or I, but that's not the point. How did you make the line? Is that obvious and clear to any reader? What's the deviation from that line? Are these simple calculations?

My real problem with these graphs, the reason I looked into them, is because the relationships depicted don't look significant to me. What's the strength of the relationship? It looks weak to me. I'm used to confidence intervals and stated deviation and variation. In contrast these graphs are highly suspect. Burkander 01:03, 9 March 2007 (UTC)

Are you suggesting that if the beta estimates were statistically non-zero that you'd favor the graphs being included? How is that discussion less complex than what we have now?? Wikiant 02:27, 9 March 2007 (UTC)

There's a distinction between what we have now, which is cited, and the graphs, which are original! There's a different test of complexity for the two!

Burkander 12:24, 9 March 2007 (UTC)

Forgive me for appearing to go in circles, but I come back to my original statement: The graphs are not original research; at best they are an original *representation* of established research. Wikiant 15:23, 9 March 2007 (UTC)

Forgive me for going in circles, but again Orginal Research is defined as unpublished synthesis of published material.

Clearly you and I are not going to agree on this. This is leading me to question the way in which decisions are made at wiki. I feel as though numerous people have complained about these graphs. You've disagreed with their complaints. And so they've stayed.

But is that fair?

Are our decisions supposed to be consensual, in which case you, even if as a lone dessenter, can prevent them from being removed? But where was the consensus to put them there in the first place? Did you, like the above creator of a graph, submit it first to this page for review?

Or are our decisions by majority? In which case, you and I, having exhausted our arguments, should appeal to the masses.

Or is there some other authority to whom we appeal?

I feel that if this continues it makes sense to ask the administrators of wikipedia to act as impartial judges.

Burkander 16:25, 9 March 2007 (UTC)

Actually, if you look through the talk history you'll see that you are the *only* person who has complained about the existence of the graphs. The only other comment on the graphs was a request to make them *more* readable. Wikiant 17:47, 9 March 2007 (UTC)

Summary of Feedback about the Davies Graphs

I've gone through this page to collect all the feedback about the (to me contentious) graphs and have reproduced that feedback below, along with my interpretation. I'm leaving out most of my feedback.

I inlude the following two quotes, from two different users, as an indication that these graphs do not meet the established test for acceptable math or deduction of original research. The test is that "[i]t should be possible for any reader without specialist knowledge to understand the deductions."

Maybe I'm just being lazy, but I don't really understand the graphs in the Debate over consequences of minimum wage laws section. Can someone improve them, or put a link to "How to Read These Graph Type Graphs?" Jerimee 05:34, 25 November 2006 (UTC)

I think the summaries are good, particularly if we can make them even more concise. However, I think that both the articles and the graphs need to be made more accessible.

I include the following two quotes because they're demonstrative of the fact that the graphs promote conclusions. Original Research is "unpublished facts, arguments, concepts, statements, or theories, or any unpublished analysis or synthesis of published material, which appears to advance a position"

It's clear from the both the graphs and from "critics of this research" that the Card Krueger book is fatally flawed. Why do we give it so much weight?

The entire book becomes a waste of time. Besides, we already have the data comparing the minimum wage relative to the mean wage against the unemployment rate for certain groups (contained in the graphs). That's pretty hard evidence that unemployment often does increase with higher minimum wages.

The following quote suggests that the reader believes a point is being promoted, and not in a neutral manner:

The statement that "We know that unemployment is correlated with higher minimum wages, as shown by the graphs" is true for the data currently displayed in the article, but of course it depends on which dataset you look at. E.g. from a pro-minimum wage site here are some stats arguing in the opposite direction based on cross-sectional data:

The below quote rails against the graphs for being suggestive and not covering a sufficient period.

Why did someone delete what I wrote about the graphs - they are blatantly an extremely poor guide, ignoring the caveats that correlation does not imply causality at all, and fall prey to sample selection; extending the series further back in time to the 1950s would give a much less clear trend. DO NOT DELETE THIS! I WILL COMPLAIN TO WIKI.

The below quote makes a complaint I made as well, that the graphs do not indicate the degree of statistical significance [I ask though, would such a measure meet the test of straight forward calculations?]

As an aside, I think it would be good to compute some measure of statistical significance for the graphs in the article. Crust 18:59, 12 January 2007 (UTC)

The below quote is a positive one. The reader finds the graphs helpful.

I think these graphs are illustrative, and the general story they tell isn't controversial. A number of economists disagree on the magnitude of unemployment effects from the minimum wage, but from the surveys I've looked at, not too many dispute their existence

Burkander 19:23, 9 March 2007 (UTC)

Some text I've temporarily deleted

Below is some text that I've taken out for now, lest it be lost. I don't have any objection to it, and I (or someone else) may put it back soon. I just needed to move stuff around.

Theoretical arguments

The traditional economic argument views the labor market as perfectly competitive. In perfectly competitive markets, the market price settles to the marginal value of the product. Therefore, under the perfect competition assumption, absent a minimum wage, workers are paid their marginal value. As is the case with all (binding) price floors above the equilibrium, minimum wage laws are predicted to result in more people being willing to offer their labor for hire, but fewer employers wishing to hire labor. The result is a surplus of labor, or, in this case, unemployment.

Gary Fields argues, however, that the standard "textbook model" for the minimum wage is "ambiguous," and that the standard theoretical arguments incorrectly measure only a one-sector market. Fields says a two-sector market, where "the self-employed, service workers, and farm workers are typically excluded from minimum-wage coverage… [and with] one sector with minimum-wage coverage and the other without it [and possible mobility between the two]," is the basis for better analysis. Through this model, Fields shows the typical theoretical argument to be ambiguous and says "the predictions derived from the textbook model definitely do not carry over to the two-sector case. Therefore, since a non-covered sector exists nearly everywhere, the predictions of the textbook model simply cannot be relied on."

An alternate view of the labor market has low-wage labor markets characterized as monopsonistic competition wherein buyers (employers) have significantly more market power than do sellers (workers). Such a case is a type of market failure and results in workers being paid less than their marginal value. Under the monoposonistic assumption, an appropriately set minimum wage could increase both wages and employment, with the optimal level being equal to the marginal productivity of labor. This view emphasizes the role of minimum wages as a market regulation policy akin to antitrust policies, as opposed to an illusory "free lunch" for low-wage workers. Detractors point out that no collusion between employers to keep wages low has ever been demonstrated, asserting that in most labor markets, demand meets supply, and it is only minimum wage laws and other market interference which cause the imbalance. However, it is important to note that collusion is not a pre-requisite for market power; segmented markets, information costs, imperfect mobility and the 'personal' element of labour markets all represent movements away from the idealised perfectly competitive labour market.

I don't see any reason to do so. ~ UBeR 22:24, 10 March 2007 (UTC)

I think the largest omission is that of any discussion of changes to the minimum wage. Upwards is easy; down is . . . unprecedented? Further, the rate of movements sets a benchmark for other wage negotiations.210.176.69.125 07:11, 11 September 2007 (UTC)DOR Sept 11, 2007

Gary Fields

I deleted the paragraph on Gary Fields as being original research. Yes, the paragraph provides a citation to the International Journal of Manpower. This is not a mainstream economics journal. In fact, in my listing of 800+ business and economics journal rankings, this journal isn't even listed. I suggest that this paragraph be deleted. Wikiant 20:53, 1 April 2007 (UTC)

Gary Fields is Ph.D. at Cornell who has published papers on the subject. Seeing as his paper is published in a (peer-reviewed?) journal, I think it holds weight and his study should be included. This, especially considering blogs are being allowed here. ~ UBeR 21:10, 1 April 2007 (UTC)

Anyone can start a peer reviewed journal. What's important is the journal's ranking. Ranking includes, for example, how frequently articles in the journal are cited in other journals. The fact that I could find no listing of IJM at all among the collections of rankings tells me that it is probably a vanity journal. Externally cited articles should come from reputable journals. Wikiant 22:30, 1 April 2007 (UTC)

If we're going to allow blogs from economists, we can allow peer-reviewed papers written by economists that have been cited at lest six times by other published papers. ~ UBeR 23:16, 1 April 2007 (UTC)

Wikiant I'm surprised at you.

Where does wiki policy state the importance of journal ranking?!?

Orignal research is "a term used in Wikipedia to refer to unpublished facts, arguments, concepts, statements, or theories, or any unpublished analysis or synthesis of published material, which appears to advance a position — or which, in the words of Wikipedia's co-founder Jimmy Wales, would amount to a "novel narrative or historical interpretation."

If it's published, you can't possibly call it original research. No matter the "ranking."

I might point out that there's no likewise compelling argument for the graphs.

Burkander 00:42, 2 April 2007 (UTC)

LOL. OK, leave it in. But, we may get flack on this in the future -- I doubt that anyone who has done serious work in this area has ever heard of this journal. Wikiant 00:58, 2 April 2007 (UTC)

Hey! I've read a few good papers from the IJM, like Richard Freeman's. ~ UBeR 01:09, 2 April 2007 (UTC)

clearly inaccurate or taken out of context quote

This sentence: "Does not have budget consequence on government. "Neither taxes nor public sector borrowing requirements rise." (Contrast with negative income taxes such as the EITC.)[12]" The taxes portion is most definately wrong, a direct consequence of paying someone say 11K a year instead of 10K a year is they'll now pay taxes on the additional 1K of income earned. Jon 21:01, 12 April 2007 (UTC)

Just to chime in, here's the entire quote:

The first is that the minimum redistributes income with no immediate budgetary consequence. Pass a minimum wage law and neither taxes nor public sector borrowing requirements rise. The direct consequences of the regulation are on market participants, not on the government budget. Contrast this with negative income taxes for low-wage workers, such as the American earned-income tax credit, or subsidies to firms which hire low-wage workers, both of which come out of the Government budget.

~ UBeR 21:49, 12 April 2007 (UTC)

I take it to mean that the tax rate doesn't change, unlike with an EITC. I agree that it isn't very clear. Burkander 18:05, 19 April 2007 (UTC)

Perhaps a longer version of this quote should be in the article. Jon 14:09, 30 May 2007 (UTC)

bad things about minimum wage

Yes I know that there is a section on it in the article but I need to do a paper on this stuff and I wana know what other people think about it. So pretend theres not already a section on it and tell me what you think about minimum wage.Jampend 13:41, 30 April 2007 (UTC)

Talk pages are for discussing improvements to the article, not discussions about the topic, and especially not to help people write papers. :-) What people think about the issue is, in fact, written it the article. I also suggest reading some of the peer-reviewed literature. (Wikipedia shouldn't be a source for research, quite frankly.) I hope this helps. Cheers. ~ UBeR 16:26, 30 April 2007 (UTC)

same thing but I dont need it for a paper

I was just wondering if there is any reason why we should just get rid of minimum wage? Because it actually might be a good idea.

Again, it's all in the article. ~ UBeR 17:53, 1 May 2007 (UTC)

Price fixing is generally frowned upon by mainstream economists. 210.176.69.125 06:56, 11 September 2007 (UTC)DOR Sept 11, 2007

Graphs axis naming incorrect?

Most graphs have on the x-axis "minimum wage as a percentage of average hourly wage" has values less than 1%. I think this should read "... as a proportion of average...". Can someone please change it?

60.234.130.7 17:15, 26 May 2007 (UTC)

I believe User:Wikiant is author of those graphs. ~ UBeR 18:15, 26 May 2007 (UTC)

Fixed. Wikiant 22:21, 26 May 2007 (UTC)

Oh dear

As one could probably have predicted, this page has been largely made useless, with all this economic stuff having taken over, and someone in their undoubted drive to economise on word usage, removing the sections on particular countries to another page altogether. Can I remind everyone that minimum wages only exist in LAW. The idea of a minimum wage is not a theory, it's a reality and if people click on the minimum wage links then it might, just maybe, be useful for them to read something about it. The debate carried on here is entirely based on the particular experience of the United States. That theory, that debate, is irrelevant to most of the rest of the world, and it makes the article almost entirely bias on a worldview level. It's pretty bias on a bias level as well, as most of this stuff comes straight out of Chicago School neo liberal agenda. It is somewhat sad that such a choice to expand this was made. I suggest that precisely the opposite be done to what has happened since I last looked - that the bulk of this economics discussion be removed to another page, for instance titled "Economic analysis of the Minimum Wage". That's what it is, that's where it should be. Only I would not do anywhere near the disservice to readers as to remove everything on the topic - as has been done for the real stuff on the minimum wage, the stuff that has some factual basis in particular countries' experiences - and replace the economic analysis with a neat summary.

I've added archive boxes as well, and will put most of this lengthy discussion above on the economics there. But as I say, I recommend it be moved shortly to a new page on economic analysis. Wikidea 23:39, 13 June 2007 (UTC)

Unless there's some discussion going soon, then I'm going to change the page as I've suggested above, and create a new article for the economic waffle. I love the way that the debate is conducted in terms of economic efficiency vs. social justice, as if there are no economists suggesting it's beneficial for the economy to not have people working for a pittance, and as if social justice has nothing to do with efficiency. But I suppose these things don't come up in first year text books anymore. Wikidea 17:17, 15 June 2007 (UTC)

Of course the minimum wage is a law. If we restrict discussion to the law, then the page becomes a single sentence perhaps followed by a list of the minimum wages in each country. Predictably, 90% of the words involve the economic consequences of the minimum wage law. Yes, the data shown in the examples are US data, but to say that the discussion is US-centric is like saying that an explanation of gravity that uses a falling apple as an example is really a discussion about fruit. Wikiant 13:55, 16 June 2007 (UTC)

People will want to know how the law works in different countries. You saying that a general overview involves a single sentence I'm afraid shows a lack of understanding. You've said nothing to argue why the economics doesn't belong in it's own page. You seem to think economics is a Newtonian science. We aren't going to get far if that's the case. Wikidea 18:00, 16 June 2007 (UTC)

You stretch my analogy. The point is that the examples, not the economic theory, are US-centric. If there are significant differences in how the law works in the different countries, certainly that is worth explanation. However, there isn't going to be much variation -- a minimum wage law is a relatively straightforward thing. As to why the economics belongs in its own page, what page do you suggest? The economic theory is the theory of the minimum wage. Wikiant 21:18, 16 June 2007 (UTC)

Sorry, I was being a bit sharp, just ignore my bad manners. I'm going to do some changes now, and you can see what you think - I'm making a new article called Economic analysis of the minimum wage or maybe Minimum wage economics? The latter sounds more snappy doesn't it? I'll make another page for Minimum wage law which can replace that list one, because it's not a real list, it's just got loads of subsections. I think on this main page however, equal weight should be given to history, law and economics. I'm not sure about the debate sections at all, and think they should either go, or be integrated with the main body. Raw tit for tat opinions aren't very encyclopaedic, even if they are sourced, are they? Wikidea 18:40, 24 June 2007 (UTC)

To discuss the minimum wage without discussing how it impacts an economy would be foolish for an encyclopedia. If you're looking for a list of the minimum wage in different countries, we have an article for that. I do not see any point in deleting fully referenced information on the minimum wage as it is discussed in the scientific literature. I don't really see what you're trying to do here... your current article called minimum wage economics is an inappropriate fork and should be deleted. ~ UBeR 19:48, 24 June 2007 (UTC)

Well I don't agree, and it's done now, so if you would like to add anything to the talk page about the economics of the minimum wage, then please direct your attention there. If you don't really see what I'm trying to do then please read what I have written above, which I think is pretty clear (e.g. equal weight to history, law and economics). And just so you aren't confused, I'll repeat what I wrote already which is that of course I don't propose to delete all the economic analysis of the minimum wage, as was unjudicially done for the section dealing with law. Readers need it all. In any case, thanks for your concern, and I hope you can keep up helpful comments. Wikidea 00:48, 25 June 2007 (UTC)

Titling the page minimum wage economics doesn't make sense as this is a term no one uses. To economists, the minimum wage is a special case of price controls and is a topic covered in the fields microeconomics and labor economics. To non-economists, the minimum wage is a number. No one refers to "minimum wage economics." I very much appreciate attempts to clean up wikipedia articles, but as a lot of people have contributed to this article over a long period, it would have been more constructive to throw your idea for a new page up for discussion. I suggest that the minimum wage economics page be deleted as the title is a misnomer and the information contained therein is a duplicate of the information contained on this page. Wikiant 01:05, 25 June 2007 (UTC)

You should concentrate first on summarising the content on this main page, because there's too much. If you don't like the name, minimum wage economics, then please rename it, and set up a redirect. I can guarantee you that outside the hallowed corridors of economic thoerists, people (although clearly they aren't as enlightened as those endowed with the viewpoint of objective analysis) think the minimum wage is much more than a number. A lot of termites having contributed to a termite mound doesn't make it worthwhile keeping. Wikidea 16:47, 25 June 2007 (UTC)

I agree fully with Wikiant. "Minimum wage economics" is a neologism created by Wikidea to create a fork. Within the scientific literature discussing the minimum wage, one discusses its role in an economy and society. Thus, your fork article should be deleted and the economic discussion of the minimum within this article should remain. You're free to expand on part of the article if you think it would be appropriate (e.g. minimum wage history), but please do not delete fully referenced material because you are uneasy with the economics of the minimum wage. Thanks. ~ UBeR 18:56, 25 June 2007 (UTC)

There is no law without a reason to make the law, and in the case of minimum wage the reasons are especially of an economic nature (like for 99% of laws). A law is not a self-sustaining thing. To indicate that a law exists because it is enacted is at best fallacious. --Childhood's End 16:58, 27 June 2007 (UTC)

Yes, but frequently the true reason that a law is enacted is often hidden. For example, in the United States, the first federal minimum wage was instituted in 1938 following political pressure from *manufacturers* in the northern states. The problem was that labor was cheaper in the south, therefore southern manufacturing firms were able to underprice northern firms. The northern firms lobbied for a minimum wage so as to eliminate the competitive advantage of the firms in the south. The true reason had nothing to do with workers' standards of living -- it had to do with firms restricting competition. Wikiant 11:12, 28 June 2007 (UTC)

Oh you're absolutely right, more than often the reasons for a law are political at first. Only, political reasons often arise from some economic or social concern, and it is usually because politicians are economically illeterate that they make laws for such concerns, unaware of or ignoring unintended consequences. --Childhood's End 15:11, 29 June 2007 (UTC)

Citations needed in the debate section

The Debate section currently has several citation needed tags that were all inserted almost 6 months ago. Both the 'Support' and 'Opposition' subsections have citation needed tags. As per WP:Citing Sources#Unsourced_material, the unsourced material needs to be removed after a "reasonable" amount of time has passed without an editor finding the sources. Does anyone have sources, or is it time to start snipping away? --76.7.143.51 19:58, 23 July 2007 (UTC)

Agreed. The "three times" item on the "opposition" side of the argument was a single reference from a bias source. Deleted. 210.176.69.125 07:03, 11 September 2007 (UTC)DOR Sept 11, 2007

Why information about other countries was removed??????

I started this section and my intention was to create a template where people can add information about minimum wage in "other" (read poor asian and african) countries. Obviously there is lot of information about minimum wage laws in US, Canada and Europe and sections on those countries can be created easily, but please provide some place to write about other countries too. (Yes. It can start with just one sentence, but any informed person who reads it and decides it is insufficient can add more information). Leotolstoy 20:12, 23 July 2007 (UTC)

Minimum wage economics

Hello, I was just wondering why the Minimum wage economics page has gone - I saw the discussion on that, and it didn't seem like it came to any clear conclusion. Can I ask everybody, to please reconsider - at least having the relevant link restored for the topic to expand there? I think there's plenty of good material, and no doubt it'll need even more space for the good work to be done. Can I have your thoughts? Wikidea 00:25, 30 July 2007 (UTC)

The article was nominated for deletion. There was discussion and a vote (see the archived debate). Unless you are offering new evidence that wasn't previously considered, there is no reason to reconsider. Wikiant 12:39, 30 July 2007 (UTC)

NPOV dispute

An editor has placed an NPOV dispute warning, yet has offered no explanation as to why. I am removing the waring pending discussion. Wikiant 19:29, 1 August 2007 (UTC)

I am again removing these tags. They need to have a clearly stated reason on the talk page for their appliction. Rich Farmbrough, 15:19 15 August 2007 (GMT).

Except Wikiant got one first. Rich Farmbrough, 15:22 15 August 2007 (GMT).

OR tags added

I added OR tags to the graphs. I still believe that these graphs represent original research. I believe the argument above is rather compelling. Since no one else has weighed in on this issue, it seems a fair compromise to have the tags, rather than delete the graphs or leave them there without a tag. Burkander 20:06, 21 September 2007 (UTC)

The data is maintained by the US government and freely accessible. The alteration is that the government's data is shown in tabular form. Here, it is presented in graphic form. Wikiant 01:11, 22 September 2007 (UTC)

I think you have a clear conflict of interest in this conversation. What you say above is false, or at least incomplete: there's a regression line in the graph. It's suggestive. And it's original research.

I don't think it's fair for you to post something and prevent any attempts to question it. This is a communal project. You're not the final arbiter.

Marking them OR is designed to stimulate discussion and review. You shouldn't stifle that process. If the community concludes that it is not OR, then the tag should be removed.

Burkander 15:15, 22 September 2007 (UTC)

Wikiant, you said it yourself "A regression line would raise issues about causality and correlation, neither of which are germane to the picture. The point is simply to show the historical data. Wikiant 22:39, 13 November 2006 (UTC)"

I agree with what you said then.

Again, Original research "introduces an analysis or synthesis of established facts, ideas, opinions, or arguments in a way that builds a particular case favored by the editor, without attributing that analysis or synthesis to a reputable source;"

The regression line is analysis. It is not attributed to any reputable (i.e. published) source.

Burkander 15:46, 22 September 2007 (UTC)

There is no regression line analysis. There is a trend line shown -- something that is simplistic enough as to require no citation. There is no claim as to p-values (though even that wouldn't constitute original research). I'm going to (once again) remove the original research tags. If you have further issue, I suggest you submit for arbitration. Wikiant 15:27, 23 September 2007 (UTC)

Trend lines are made using Least Squares. As Dr. Gujarati wrote in Basic Econometrics Fourth Edition, "it is the method of ordinary least squares that is used extensively in regression analysis..." Thus, it is correct to call this a regression line. Note that typically linear relationships will include a measure of covariance or correlation to support any apparent relationship.

You even call it a regression line on your talk page! User talk:Wikiant

Burkander 20:59, 23 September 2007 (UTC)

I don't disagree that the line is a regression line. I disagreed with your statement that "the regression line is analysis." Without stating probability values associated with the regressor, there is no analysis. Absent these p-values, there is no statement as to the significance of the relationship shown.Wikiant 22:38, 23 September 2007 (UTC)

absent probability values the line is misleading. You leave us to believe that these graphs make statements about the relationship between these variables without demonstrating the significance of the relationship.

Moreover you calculate the Minimum Wage as a proportion of the average hourly wage. That's not public data listed in tabular form that you display in graphical form; that's data that you've created using public data. Is that really the relevant metric? Have peer reviewed journals weighed the use of that metric?

As I'm sure you know, I've submitted this for third party review. As such, it's not appropriate for us to discuss this further. I hope we can call a truce until that process ends.

Burkander 22:53, 23 September 2007 (UTC)

I've reviewed the article, and the arguments, and have come to the following conclusion. The graphs in question are difficult to understand, and the value added to the article is difficult for me to see Image_use_policy#Content. I feel the first graph provides the most value, and some work to the description and content (including a direct link to the raw data and clarification of the purpose of the graph) would add great encyclopedic value. I also feel the section is too short to include this many pictures, and feel that the best solution would be to move all three graphs in question to the talk page Image_use_policy#Image_queuing until the section can be expanded, or until the first graph [1] can be improved. Jaredbelch 07:24, 25 September 2007 (UTC)

Here is what I heard Jaredbelch say: (1) delete graphs 2 and 3; (2) link to the raw data for graph 1; (3) improve description accompanying graph 1. I have no problem with this as a compromise solution. In fact, (while I claim that a regression line (sans p-values) doesn't come close to constituting original research) I'm willing to go further and remove the displayed regression line from graph 1. Burkander, what say you? Wikiant 02:16, 26 September 2007 (UTC)

That sounds good to me. I'm glad we could come to some agreement. Burkander 17:17, 26 September 2007 (UTC)

I'm out of town for a couple of days, but will get the appropriate changes in for editors' review by Monday. Wikiant 22:16, 26 September 2007 (UTC)

Temporary Removal of Graphs

In accordance with the above agreement, I am moving all three aforementioned graphs to the talk page, below. Burkander 23:45, 26 September 2007 (UTC)

Comparison of the minimum wage to unemployment among low skill workers in the U.S. The two lowest points are for the years 1999 and 2000. Unemployment for all workers in those two years was the lowest since 1970. The data show a correlation in this data set between the level of the minimum wage and unemployment among lower-educated workers.

Comparison of the minimum wage to unemployment among college educated workers in the U.S. In this data set, there is essentially no correlation between the minimum wage and unemployment among higher-educated workers.

Comparison of the minimum wage to unemployment-population ratio among blacks relative to whites in the U.S. The data shown here indicate almost no correlation, or perhaps a weak positive correlation, between the level of the minimum wage and unemployment among black workers relative to white workers.

Quick Note

No mention that it may more easily enable cartel like activity. A non-binding minimum wage may very well indicate to employers the going rate to pay(that all the other guys are likely to be paying) rather than pay the MPL.

There are papers on this I'm sure if not I might right one!