Nobel Prize research shows that raising the minimum wage is justified, but the "minimum wage" is only "chicken ribs" after all

This year’s Nobel Prize winner and economist David Card’s research shows that “raising the minimum wage is justified”.

Card "for his empirical contribution to labor economics ", together with two other economists, he won the Nobel Prize in Economics in 2021.

Card's most famous paper is "Minimum Wage and Employment" published jointly with Kruger in 1994. The paper pointed out that the minimum wage law does not increase unemployment and reduce the welfare of the working population as predicted by many economists. Rather, it contributes to the improvement of labor welfare and may also increase employment.

At present, most of the major countries in the world have established a minimum wage standard, and some countries do not have a minimum wage standard, but this does not mean that the minimum wage level in these countries is low. And in the countries that set the minimum wage standard, no one has seen any increase in the minimum wage standard that has significantly reduced poverty. Otherwise, there is no need for economists to conduct in-depth research to find that raising the minimum wage standard will help improve labor welfare.

In Europe, Austria, Italy and the Nordic countries do not set minimum wage standards, but their bottom line is "usually higher than the legal minimum wage in Western Europe." Germany also began to introduce minimum wage standards in 2015, but this does not affect Germany's high “wage bottom line” in the past.

The main purpose of setting minimum wage standards in various countries is to reduce poverty. However, if people look closely, they will find that many of those who hold the minimum wage are workers with better family economic conditions.

For ordinary workers, low work pressure, low labor intensity, low wages, high work pressure, high labor intensity, high wages. Workers with a smaller family financial burden are often willing to work less with less wages, while those with a heavier family financial burden are naturally willing to work more.To get more wages. Only a minority of the labor group, those poor workers who are frail and lack labor skills, will get the minimum wage.

Increasing the minimum wage will increase the utility of wages, and the amount of labor that those earning the minimum wage are willing to pay will also increase. The total work benefits including leisure are not It will definitely increase.

Use administrative and legal means to directly intervene in the labor market, and the efficiency will be very low. If administrative and legal means can be used to raise wages simply and efficiently, then the problem of improving income distribution will not become a difficult problem for governments in the world today.