THE idea of a higher minimum wage (along with a citizen's income) is getting more momentum, as governments grapple with the rise in inequality over recent decades. Britain introduces a "living wage"* of $7.20 an hour today (around $10.30) for those aged over 25 while Democratic Presidential Candidate Bernie Sanders supports a rise in the minimum wage to $15 an hour, phased in over seven years (the federal minimum wage is currently $7.25 but many states have higher requirements).
Economists have been grappling for decades with whether (and by how much) a higher minimum wage affects employment. A paper by David Neumark of the University of California (on the very useful IZA World of Labor's website) summarizes the literature. Most studies show there is an impact with a 10% rise in the minimum wage causing around a 2% drop in employment for affected workers (normally the...Continue reading
Source: Business and finance http://ift.tt/1UxeZ2o
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