It does not, however, change the fact that there is tons of evidence that the U.S. minimum wage decreased employment, a point which you haven't bothered to counter.
Actually, I've already noted that the heterogenous nature of labor markets allows for negative employment effects in a monopsony model, while the orthodox model does not allow for any broad positive employment effects. More importantly, it's likely that there are additional heterogeneities in employment trends that render many of the analyses you refer to deficient, as evidenced by an empirical source such as Dube, Lester, and Reich's
Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties:
Local case studies of minimum wages typically find no significant employment effects, while studies using national data find some negative effects for teenagers. We argue that heterogeneity in spatial employment trends generates biased estimates in national analyses and causes overstatement of precision in local and national studies. We propose two new local estimators that compare all contiguous counties or metro areas in the U.S. that straddle a state-based minimum wage gradient. We find that the negative elasticities in national fixed-effects models are generated by unobserved heterogeneities in employment trends. Our local estimators are more robust and show no employment effects.
You've also said that you did have the ability to access many of this work in its entirety but simply weren't aware of it, so there's little excuse to remain willfully ignorant of it.
I won't argue that in a monopsony, minimum wage doesn't increase employment (to an extent). Most minimum wage jobs, however, are not part of a monopsony; most of them are jobs in places like McDonalds and Walmart where jobs are so easy to get that there is almost always competition between employers. In some places, in some industries, at some moments in time, minimum wage might increase employment- hence the New Jersey study. In a large country overall, though, this is very unlikely to be the case. Monopsony power just isn't a big enough factor.
That is not a well-informed claim, as there is a substantial amount of empirical research that demonstrates the precise opposite to be true. For example, consider Addison et al.'s
Do minimum wages raise employment? Evidence from the U.S. retail-trade sector:
This paper examines the impact of minimum wages on earnings and employment in selected branches of the retail-trade sector, 1990–2005, using county-level data on employment and a panel regression framework that allows for county-specific trends in sectoral outcomes. We focus on specific subsectors within retail trade that are identified as particularly low-wage. We find little evidence of disemployment effects once we allow for geographic-specific trends. Indeed, in many sectors the evidence points to modest (but robust) positive employment effects.
We can also consider the effects of increased human capital acquisition induced by minimum wage legislation, as observed in Cahuc and Michel's
Minimum wage unemployment and growth:
This paper shows that, in an overlapping generations, model with endogenous growth, minimum wage legislation does not necessarily has negative consequences on economic performance. Such legislation can have positive effects on growth by inducing more human capital accumulation. More precisely, a low demand for unskilled labor, induced by a minimum wage, may create an incentive for workers to accumulate human capital. Moreover, it is possible that a decrease in the minimum wage lowers the welfare of each agent in the economy.
Even aside from formal legislation, we can refer to the effects of union activity promoting incentives for human capital acquisition in apprenticeship training and the like through the establishment of minimum wages, which is supported by Dustmann and Schönberg's
Training and Union Wages:
This paper investigates whether unions, through imposing wage floors that lead to wage compression, increase on-the-job training. Our analysis focuses on Germany. Based on a model of unions and firm-financed training, we derive empirical implications regarding apprenticeship training intensity, layoffs, wage cuts, and wage compression in unionized and nonunionized firms. We test these implications using firm panel data matched with administrative employee data. We find support for the hypothesis that union recognition, via imposing minimum wages and wage compression, increases training in apprenticeship programs.
For a more direct and straightforward analysis of the minimum wage's ability to provide efficiency benefits (as some do not conceptualize increased employment as increased static efficiency), we could consult Kass and Madden's
Holdup in oligopsonistic labour markets - a new role for the minimum wage:
We consider a labour market model of oligopsonistic wage competition and show that there is a holdup problem although workers do not have any bargaining power. When a firm invests more, it pays a higher wage in order to attract workers from competitors. Because workers participate in the returns on investment while only firms bear the costs, investment is inefficiently low. A binding minimum wage can achieve the first-best level of investment, both in the short run for a given number of firms and in the long run when the number of firms is endogenous.
To confirm the aforementioned claim that minimum wages may shift activity to high-wage labor and away from unskilled, low-wage labor (which would also build on our earlier points about human capital acquisition), consider Acemoglu's
Good Jobs versus Bad Jobs:
This article develops a model of noncompetitive labor markets in which high‐wage (good) and low‐wage (bad) jobs coexist. Minimum wages and unemployment benefits shift the composition of employment toward high‐wage jobs. Because the composition of jobs in the laissez‐faire equilibrium is inefficiently biased toward low‐wage jobs, these labor market regulations increase average labor productivity and may improve welfare
Finally, consider Todorovic and Ma's
A Review of Minimum Wage Regulation Effect—The Resource-Based View Perspective, which employs meta-analytic techniques to expand beyond the potential deficiencies of single or isolated studies:
The debate around minimum wage regulations, in the aftermath of recent regulatory changes in the United States, continues to grow. This article contributes to present literature by engaging the minimum wage controversy from the resource-based view theoretical perspective. Based on literature review, we find that minimum wage regulations appear to exhibit different impacts in different countries. Using meta-analysis of the related literature, we propose a conceptual framework that highlights the relationship between national resource base and minimum wage regulatory impact. Specifically, we posit that minimum wage impact on a country, such as the United States, is moderated by the national resource base. Further, we identify opportunity cost associated with inadequate minimum wage regulations, as consisting of education, entrepreneurial propensity, and cost divergence. Our conclusions point to the positive effects of the minimum wage controls, including increased education, more productive operating practices, and the emphasis on skill development and high value activities.
So all in all, we actually have rather substantial empirical evidence of the minimum wage's benefits for employment, human capital acquisition, productivity, which constitute efficiency improvements or aids to such. The static orthodox model thus appears rather naive and incomplete in comparison.
I even told my economics-major brother that you were arguing that it was, and he said it was one of the stupidest arguments he's heard lately.
He certainly doesn't sound like the brightest bulb on the Christmas tree. Is he a first-year student? That would explain why he's so ignorant of labor economics.
Since when did libertarianism, the ideology that the constitution follows, become extremism?
The Constitution actually contains numerous anti-democratic elements not compatible with libertarianism, even your pseudo-libertarian capitalist variant, believe it or not.
Many Republicans are libertarians. The two are not mutually exclusive like libertarians and Democrats.
I'm not a part of the Libertarian Party, but I'm definitely a libertarian.
Democrats and Republicans are typically not libertarians because of their capitalist ideology. As libertarianism and capitalism are incompatible, it's of course almost comical to suggest that "many Republicans are libertarians," let alone that the "Libertarian" Party might be. :rofl
Economic critics also make the case that minimum wage doesn't actually improve employment, overall. Indeed, there is ample evidence that minimum wage laws hurt employment. [9] [10] For indeed, of the top 15 employment rates only one (Iowa, at #5) has a minimum wage higher then Federally mandated, while four have one lower (Wyoming #3, New Mexico #7, Kansas #12, Arkansas #13).
This aptly illustrates the overall weakness of your approach; it's based on the selective incorporation of raw data without consideration of a wide number of additional variables that ultimately provides us with little to no information about the actual minimum wage. For that, we'd refer to the aforementioned empirical research, which supports my own assessment.
This analysis may be called oversimplistic, but can anyone deny that this is precisely what occurs when the min wage is raised?.
Certainly, and it would in fact be quite compatible with an informed labor economics analysis. Because of the fact that firms can cut wages without losing all of their workers, we are aware that they are confronted with upward sloping labor supply curves rather than infinitely elastic labor supply curves. In the context of the monopsonistic/oligopsonistic labor market, then, wage increases will be a valuable counter-balance to underpayment, and will reduce unemployment, which is a form of static inefficiency. Additionally, there is a hypothesis known as the efficiency wage hypothesis examined in labor economics, which posits that payment of wages above the market-clearing price will increase worker productivity. From that, we can infer that unit labor costs will decrease as wages increase. More importantly, the available empirical literature into the topic supports this analysis, as noted.
