"The average age of a min-wage employee is 29 in the USA."

Maybe I'm missing something. How does that quote - or that article - make the claim that the average minimum wage employee here is 29? Median is not average, 28 is not 29, and fast-food workers are not the only minimum wage workers nor do they have to be minimum wage workers.

Spy -- didn't mean to convey contempt, just wanted to point out that there is no consensus on this issue among economists.

Labour econ as taught in Econ 101 assumes a perfectly competitive and frictionless market. This is of course a useful starting point; however, one should be careful in using the conclusions of this model in making blanket pronouncements about policy impacts.

to answer your last question, I don't know the answer. If you don't mind, Id pick a third option: Increasing the minimum wage tends to have no material impact on employment; thus, other factors (e.g., equity, distribution of wealth) should be driving the debate on the minimum wage.

It said over 28. Median is close to average and usually identical in population sizes this large. Fast-food workers make up the vast majority of minimum wage jobs.

Bo as usual you are retarded -- average would be higher than median in this case. In any case, 80% of min wage workers are over 25 http://www.bls.gov/cps/minwage2007tbls.htm

How vast is vast majority? Give the numbers. Seriously, Putin, I want to agree with you. This is a topic I'd like to get a fucking grip on since it's going to affect me for the next 10+ years.

Frank ... Aside from the random unnecessary insult associated with webDip forum posters, those are good stats.

Spy -- Wikipedia explains the theory behind a wage floor increasing employment better than I can: http://en.wikipedia.org/wiki/Monopsony#Minimum_wage

My point isn't that this is an inherently more "correct" or "realistic" model than the neoclassical one -- my point is just that there are competing economic theories on the employment effects of the minimum wage. Empirically, there is also conflicting evidence -- some studies (see Card and Kreuger) find a positive employment effect, some find a negative effect, some find no effect.

" About three-fifths of workers earning the minimum wage or less in 2012 were employed in service occupations, mostly in food preparation and serving related jobs"

http://www.bls.gov/cps/minwage2012.htm

Link me link me link me link me.

No reciprocation, ever.

"No reciprocation, ever. "

That's what she said, isn't it, Putin. Or maybe not...she's not too good at forming words, is she?

You're right, this is unfair, Putin. Here is a link.

http://www.curling.ca/championships/mixed/history-of-the-mixed/

Krellin, do you have any evidence that putin is sleeping with a mentally handicapped person? I don't think I see the humor in the accusation, if it's not intended seriously.

Who said anything about the mentally handicapped? She's gargling. Ever try to talk when you are gargling?

semck, are you a fan? roar of the rings Olympic trials coming up in winnipeg in a few weeks. is your money on kevin martin or glen howard?

Don't try humor, Semck. It doesn't suit you.

I'm afraid I'm not, Frank, and now I feel bad. :( I was just trying to think of a very random link, for a fairly silly joke, and that was one of the first things to come into my head (who knows why?). Sorry for the false signal -- I'd be happy to hear your opinion on the Martin/Howard question if you care to share, though!

Look at who PAYS minimum wage in Canada and who lobbies our government to prevent increases.

McDonald's.
Toys 'R' Us.
Tim Hortons(drive thru coffee giant).

These companies earn annual profits in the hundreds of millions and billions of dollars. They can afford it.

"My point isn't that this is an inherently more "correct" or "realistic" model than the neoclassical one -- my point is just that there are competing economic theories on the employment effects of the minimum wage."

I get your point Frank. Let us say their might be an advantage to setting a minimum wage at a particular level. If so then maybe the question is what should be that level. How can we tell?

Spy - in my opinion, the minimum wage should be raised to a living wage, where a worker can afford a decent quality of life. I'm not an economist so I don't know how to precisely measure this but in my opinion, its definitely higher than the current level in the US.

I think one reason that the minimum wage hasn't been raised (or at least pegged to inflation) is that there are a lot of misconceptions on the topic:
Myth #1: Raising the minimum wage increases unemployment (this hasn't been proven, in practice or theory)
Myth #2: Most minimum wage earners are teens who are secondary earners in their household and/or will be moving on to better jobs soon (not true - over 80% of min wage earners are over 25, 75% work full time at their min wage jobs)
Myth #3: Forcing companies to pay a higher wage would drive corporations out of business (you can just look at other countries to see this isn't true; the min wage is >$10 in Canada and McDonald's and Walmart are still doing fine!)

"drive thru coffee"

Lolwut?

I can't believe how cold hearted people are. If you make minimum wage, maybe you can get by but what kind of life do you have? You can't afford a new car or go on a cool vacation or anything! Why not just raise the minimum wage to $1,000,000 a year! Now everyone will be millionaires! Everyone says that raising the minimum wage doesn't hurt job creation or the economy. So what's the problem? You can do some real living on a million dollars a year! I, the compassionate person I am, vote for $1,000,000 a year minimum wage!

"here's my post from last time, which shows why all u people parroting stuff about "econ 101" and "equilibrium wage" are so off base. this is especially for fasces, who somehow thinks that his one year of economics makes him an expert on anything to do with the subjec"
When have I ever claimed to be an expert, my latest posts on economics have said 'I'm only in second year econ so I could be wrong but here is what I think"

I'm just stating a fact, that basic economics tells us the minimum wage is bad. No obviously using Econ 101 in a real world argument as akin to trying to debate the merits of space travel before learning the laws of special relativity.

I'm just stating that an Econ 101 textbook uses minimum wage as why price floors are bad.

@goldfinger, yes there might be some uncertainty between a worker willing to accept $6 vs $10 an hour, but since that translates to a difference of $8320 or 40% (assuming 40 hrs/week and 52 weeks per year) in yearly income those are not close price points and represent two different industries, Within a single employer wage differences between employees performing the same task would certainly not exceed differences of 10%, and would likely be less than 5%. At differences that small the employer is not going to find it efficient to negotiate, and instead will simple set a specific price. Now that may not hold true for small employers, but small employers tend to have better employee/employer relations and pay higher than minimum wages anyways.

My point being that uncertainty between a higher wage vs low wage worker within a single industry or employer is going to be very slight, and the employer will have a very good idea what the minimum wage the labor market for that particular job is willing to bear. There would be little uncertainty and the price would tend to move towards an equilibrium. Removing an effective floor will lower wages.

@everyone

while a consensus regarding the effect of minimum wage on employment has not yet been reached the literature is very clearly moving in that direction.

http://ideas.repec.org/p/dkn/econwp/eco_2008_14.html

@Puddle - I just made up those numbers arbitrarily. They're supposed to represent two workers willing to do the same task, but at different prices. I think you're missing the larger picture of the idea.

Fasces - again, you are wrong. I am guessing that since you are Canadian, you used the Ragan Lipsey book in 1st year but I guarantee that no econ textbook would say "price floors are bad." Instead, your book probably said something like "in competitive markets, price floors are inefficient and cause deadweight loss". That's a positive statement not a normative or prescriptive one...not trying to be a dick but you should try and learn the difference. Sometimes a policy that creates deadweight loss can still be desirable because it achieves other goals.

"min wage is >$10 in Canada"

Uh, last time I checked, "Canada" doesn't have a minimum wage, and in ontario its over $10 dollars...so.....

Iln, reread my sentence, it was correct (except fine, alberta has a $9.95 min wage)

@goldfinger, the specific numbers don't matter, but percentage change between various wages does, and taken with wage uniformity across industries and employers makes the point fairly clearly that the degree of uncertainty a firm would face when trying to determine what wages a potential employee would accept is small.

Frank,
http://www.minimum-wage.ca/
that is all

"Fasces - again, you are wrong. I am guessing that since you are Canadian, you used the Ragan Lipsey book in 1st year but I guarantee that no econ textbook would say "price floors are bad." Instead, your book probably said something like "in competitive markets, price floors are inefficient and cause deadweight loss". That's a positive statement not a normative or prescriptive one...not trying to be a dick but you should try and learn the difference. Sometimes a policy that creates deadweight loss can still be desirable because it achieves other goals."
It wasn't Ragan Lipsey but yes I was paraphrasing, however according to Econ 101 minimum wage would cause an increase in unemployment. Now obviously some higher level economics will claim otherwise, however thats not what I was debating. Socrates disatisfied claim that no econ 101 textbook would claim this, and I was calling him out.

That said here is what my econ 102 textbook (which I was unable to sell) has to say on minimum wage. Econ 201 doesn't mention minimum wage and my Econ 211 textbook doesn't have an index so this is the only Economics textbook I have that mentions minimum wage:
Figure 9.5 is a basic price floor supply and demand graph. With the labour surplus being called unemployment.

Figure 9.5 reviews the basic economics of a minimum wage. When a minimum-wage law forces the wage to remain above the level taht balances supply and demand, it raises the quantity of labour supplied and reduces the quantity of labour demanded compared to the equilibrium level. Because there are more working willing to work than there are jobs, some workers are unemployed.
It is important to note that minimum-wage laws are not a predominant reason for unemployment in the economy, because most workers in the economy earn wages well above the legal minimum. Minimum-wage laws are binding most often for the least skilled and least experienced members of the labour force, such as teenagers. It is only among these workers that minimum-wage laws explain the existence of unemployment.
Although figure 9.5 is draw to show the effects of a minimum-wage law, it also illustrates a more general lesson: If the wage is kept above the equilibrium level for any reason, the result is unemployment. Minimum wage is just one reason why wages may be "too high".

Nelson's Principles of Macroeconomics Fifth Canadian Edition