Minimum wages have never been higher on the agenda—for politicians and the general public—gaining mass media attention in the US with the "Fight for $15" campaign, and in the UK with the introduction of the National Living Wage in April 2016.
In a recently published opinion piece, IZA World of Labor’s new Editor-in-Chief Daniel S. Hamermesh criticizes "absurd" proposals (in this case by a UK Labour Party MP) to raise minimum wages far above national averages. Hamermesh writes:
"The Labour spokesperson argued that a higher wage would motivate workers more, so that their productivity would rise enough to justify this massive increase in labor costs. There are two reasons why this point is specious:
1) Even with this possible motivation for greater effort, could the typical bank employee, retail salesperson or factory worker really double her or his effort? I doubt it.
2) Logically, if employers believe that such an immense increase in pay would so increase effort as perhaps even to raise their profits, have they started paying such higher wages already? They have not, which suggests they know that this increase would not pay for itself..."
Though internationally many are calling for minimum wage hikes, economists have traditionally been against such policies due to their negative effects on overall employment. But evidence does suggest that there are also economic arguments for introducing minimum wages, or increasing rates that already apply.
David Neumark writes in his IZA World of Labor article that "a higher minimum wage may discourage employers from using the low-wage, low-skill workers that minimum wages are intended to help." He adds the following criticism of such policies: "Although a minimum wage policy is intended to ensure a minimal standard of living, unintended consequences undermine its effectiveness." Conversely however, Richard Dickens writes—in his article on how countries should set their minimum wage rates—that there is "a growing consensus among economists and policymakers that minimum wages, set at the right level, may help low-paid workers without harming employment prospects."
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Upcoming events and calls for papers
Call for papers: London Conference on Employer Engagement in Education and Training, 21-22 July 2016, London, UK. This conference will present new research on employer engagement in education, and explore implications for policy and practice. Papers are encouraged from researchers and analysts in universities and elsewhere using qualitative and quantitative methodologies from a wide range of disciplines including education policy, economics, sociology, human resource management, and anthropology. Papers can relate to activity taking place in any geographic location. For more information, please visit the website.