George Stigler considered the economics of this type of legislation, and traditionally this type of policy is viewed as a price floor in the labor market, causing the level of employment to drop.
One paper argues that implementing this type of policy does not promote "shock theory" in which entrepreneurs are awakened into developing new, more profitable processes. That paper also argues that implementing this type of policy does a worse job of helping the poor than would a negative rate tax bracket. David Card and Alan Krueger argued that this policy is positively coordinated with (*) employment rates, a claim they later recanted after their study of restaurant employees in Pennsylvania and New Jersey was shown to be biased. George Stigler considered the economics of this type of legislation, and traditionally this type of policy is viewed as a price floor in the labor market, causing the level of employment to drop. For 10 points, give the term for this economic policy that mandates that U.S. workers must be paid at least $7.25 per hour.
One paper argues that implementing this type of policy does not promote "shock theory" in which entrepreneurs are awakened into developing new, more profitable processes.
minimum wage