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[lsanderson]

Would cutting the minimum wage raise employment?

It seems that more and more Serious People (and Fox News) are rallying around the idea that if Obama really wants to create jobs, he should cut the minimum wage.

Would cutting the minimum wage raise employment? - Paul Krugman Blog - NYTimes.com

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Comments

Uhm

[lsanderson.livejournal.com]

No. Please take the issue up with Krugman, but what I believe he's saying is that it fails to scale; what's not true in macro, is also not true in micro.

Re: Uhm

[dd-b.livejournal.com]

I've got a comment in the moderation queue at the source. Yes, he's saying it fails to scale to everything, but the claim isn't that it scales to everything, so refuting that claim doesn't accomplish anything.

Re: Uhm

[lsanderson.livejournal.com]

1. Why did I go from minimum wages to overall wages? Clearly, a cut in minimum wages –which only apply to some workers — can raise the employment of those workers at the expense of other workers. But the advocates of a cut are claiming that they can raise overall employment. The only way that can happen is if a reduction in average wages raises employment.

Re: Uhm

[dd-b.livejournal.com]

Thanks, I've replied at length there. Because the guy he links to, in particular, very clearly shows he doens't have the faintest clue how hiring decisions are made.