Quotation of the Day…

by Don Boudreaux on November 9, 2013

in Reality Is Not Optional, Seen and Unseen, Work

… is from Linda Gorman’s 2007 essay “Minimum Wages” in the indispensable Concise Encyclopedia of Economics (David R. Henderson, ed.) (footnote and link original):

In addition to making jobs hard to find, minimum wage laws may also harm workers by changing how they are compensated.  Fringe benefits – such as paid vacation, free room and board, inexpensive insurance, subsidized child care, and on-the-job training – are an important part of the total compensation package for many low-wage workers.  When minimum wages rise, employers can control total compensation costs by cutting benefits.  In extreme cases, employers convert low-wage full-time jobs with benefits to high-wage part-time jobs with no benefits and fewer hours.  David Neumark and William Wascher found that a 10 percent increase in minimum wages decreased on-the-job training for young people by 1.5–1.8 percent.6   Since on-the-job training is the way most people build their salable skills, these findings suggest that minimum wage laws also reduce future opportunities for the unskilled.

Be Sociable, Share!

Comments

comments

Add a Comment    Share Share    Print    Email

Previous post:

Next post: