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The Age (Australia):
Minimum wage rises don't lift unemployment, analysts agree

11 July 2014

And over the past 20 years, academic economists have done many empirical studies showing that's not how minimum wages work in practice. They've also developed more sophisticated theories that better fit the empirical facts. It's all explained in the June issue of the ACTU's Economic Bulletin. ... Monopsonistic models don't have an unambiguous prediction for the employment effect of a minimum wage. A paper by Bhaskar, Manning and To, published in the 'Journal of Economic Perspectives' in 2002, concluded that ''a minimum wage set moderately above the market wage may have a positive effect or a negative effect on employment, but the size of this effect will generally be small''.

This article was published online by The Age (Australia) on July 11, 2014
Link to article here

Related publications
Monopsony in Motion: Imperfect Competition in Labor Markets (2005) Alan Manning, Princeton University Press
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Related links
Alan Manning webpage
Labour Markets Programme webpage
Community Programme webpage

Read more... The Age (Australia)