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Reconciling facts with fiction Minimum wages in a Post-Keynesian Perspective
[working paper]
Corporate Editor
Universität Hamburg, Fak. Wirtschafts- und Sozialwissenschaften, FB Sozialökonomie, Zentrum für Ökonomische und Soziologische Studien (ZÖSS)
Abstract There has long been a discussion about the employment impact of minimum wages and this discussion has recently been renewed with the introduction of an economy-wide, binding minimum wage in Germany in 2015. In traditional reasoning, based on the allocational approach of modern labour market economic... view more
There has long been a discussion about the employment impact of minimum wages and this discussion has recently been renewed with the introduction of an economy-wide, binding minimum wage in Germany in 2015. In traditional reasoning, based on the allocational approach of modern labour market economics, it has been suggested that the impact is clearly negative on the assumption of a competitive labour market and clearly positive on the assumption of a monopsonistic labour market. Unfortunately, both predictions conflict with the empirical findings, which do not show a clear-cut impact of significant size in any direction. A post-Keynesian employment market, based on a different pre-analytical vision of the economy than traditional mainstream economics, is presented here. Its most likely prediction of a negligible impact is very much in line with the empirical evidence.... view less
Keywords
minimum wage; Keynesianism; demand; supply; effect on employment; labor market policy; allocation; theory; welfare
Classification
Labor Market Policy
Labor Market Research
National Economy
Free Keywords
Post-Keynesianism; aggregate demand; aggregate supply
Document language
English
Publication Year
2017
City
Hamburg
Page/Pages
18 p.
Series
ZÖSS Discussion Paper, 64
ISSN
1868-4947
Status
Published Version; reviewed
Licence
Deposit Licence - No Redistribution, No Modifications