[GGG]

Originally Posted by cal_guy

Here's a good article detailing the changing consensus among economists over the minimum wage.

https://noahpinion.substack.com/p/wh...is-pretty-safe

Here is the article that was previously posted. An increase to the minimum wage will have positive affects throughout the US. $15 may be a little too high in some rural areas.

So, Dube’s literature review above suggests that in general, minimum wages aren’t harmful if they’re below about 60% of the median wage. The median weekly earnings of U.S. workers currently stands at around $994, so assuming a 40-hour workweek that’s about $24.85/hour. 60% of that is about $14.91, meaning that $15 is right around the maximum safe level. But because the economy will recover from COVID-19 and wages will rise, and because Biden’s $15 minimum wage would undoubtedly be phased in over time, $15 will probably be under the national “safe” level by the time the law goes into effect. And thanks to inflation, it will be further and further below the “safe” level every year (we really should index minimum wage to inflation, but that’s another story).

But that’s at the national level. What about at the local level? In big cities where wages (and living costs) are naturally higher, $15 won’t be any problem at all. But in small towns in Kansas, where wages (and living costs) are naturally a lot lower, a federally mandated $15 wage could be a big problem.

Fortunately, there’s reason to think that small towns won’t be so screwed by a too-high minimum wage. The reason is that these small towns also tend to have fewer employers, and therefore more monopsony power. And as we saw above, more monopsony power means that minimum wage is less dangerous, and can even raise employment sometimes.