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Current policy debate among US lawmakers includes proposals for raising the minimum wage nationwide to \$15.

It is currently \$7.25 by federal statute, which is the amount in effect except in states and municipalities that have imposed a local adjustment, though no state requires as much as $15, and the federal amount carries no automatic periodic adjustment for changes in the cost living, nor even the value of the currency.

Some sources conclude that such a change is feasible, but a greater raise to as much as \$20 (by current value of currency) would be counterproductive, because it would lead to the elimination of many low-wage positions, harming not helping those who currently hold them. Other sources argue that the more aggressive increase is feasible.

How might the conflicting arguments be evaluated in mainstream academic economics schools, and how might systemic policy reforms lay a better foundation in the economy for a higher floor on hourly earnings while still ensuring adequate opportunities to those who stand to benefit from such changes? What relevant lessons may be available from countries with economies similar to that of the US, but with greater adjustment for inequalities in standard of living?

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    $\begingroup$ "How might the conflicting arguments be evaluated in mainstream academic economics schools" is a pretty big question in itself. "What relevant lessons may be available from countries with economies similar to that of the US, but with greater adjustment for inequalities in standard of living?" is a separate large question. $\endgroup$
    – Giskard
    Sep 22 '21 at 8:17
  • $\begingroup$ "how might systemic policy reforms lay a better foundation in the economy for a higher floor on hourly earnings while still ensuring adequate opportunities to those who stand to benefit from such changes" is again a separate question and contains several ill-defined phrases, such as "better foundation" and "adequate opportunities". $\endgroup$
    – Giskard
    Sep 22 '21 at 8:18
  • $\begingroup$ Please edit your question to make it clear and most of all concise and answerable. If you wish, you can post other (concise) questions in separate posts. $\endgroup$
    – Giskard
    Sep 22 '21 at 8:19
  • $\begingroup$ @Giskard: How higher wages affect workers depends on the structure of the labor market, and how it might change along with wage changes. If an increase in the minimum wage causes firms to reorganize, or if it is accompanied by broad policy reform, then its suggested effect on workers may be more favorable than in the pessimistic case of simply resulting in a reduction in the number of jobs. Given these considerations, it has seemed to me that the various questions are naturally related such that placing them in separate posts would dilute the richness of a discussion. $\endgroup$
    – epl
    Sep 22 '21 at 21:45
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With regard to minimum wage I think that we should look at the data and to what they tell us. The fact is that there are evidences that both minimum wage supporters and opponents are right. For example, in this paper (https://academic.oup.com/qje/article/134/3/1405/5484905?login=true#140160997) the researchers find that

"the overall number of low-wage jobs remained essentially unchanged over the five years following the increase [of minimum wage]"

In other studies (https://www.nber.org/system/files/working_papers/w28388/w28388.pdf), in contrast, other researcher find that

the evidence is much clearer that employment does decline among low-skilled workers when the minimum wage increases – and the most relevant evidence may be that for directly-affected workers

The question of inequality is, to me, a separate one that should be addressed in another tread not because it is irrelevant but - on the contrary - because it is very large

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  • $\begingroup$ The core question for me is how to evaluate the conflicting arguments, or indeed, the conflicting evidence. $\endgroup$
    – epl
    Sep 23 '21 at 3:00
  • $\begingroup$ Does the report from Cengiz et al. help us predict the effect for a rate greater than $15? $\endgroup$
    – epl
    Sep 23 '21 at 3:01
  • $\begingroup$ The fact is that the more the minimum wage goes up the more the employment goes down (as the second paper that I linked shows); but - as the first paper that I posted says - a very small minimum wage (i.e.: a minimum wage under the median market wage) can actually work. So my answer is: it depends from what wage level you start $\endgroup$
    – Giord
    Sep 23 '21 at 16:41
  • $\begingroup$ The premise of the question is that the cohort currently benefiting from a minimum wage would benefit further from an increase up to \$15. The question is whether this cohort would benefit even further from an increase beyond \$15 (e.g. by earning more income), or rather would be harmed by such a change (e.g. by being excluded from the job market). $\endgroup$
    – epl
    Sep 25 '21 at 7:04

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