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The Economics and Ethics of Minimum Wage Legislation

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  • Robert Prasch
  • Falguni Sheth

Abstract

Recent empirical studies have led the economics profession to question the proposition that minimum wage legislation necessarily leads to greater unemployment. This paper extends the analysis of these studies by providing several theoretical reasons why these empirical results may reflect a larger truth. Moreover, it addresses a relatively neglected aspect of the minimum wage debate - its ethical dimensions. Specifically, do the elementary principles of economic justice mandate that employees who “play by the rules”, should earn a “living wage”? This paper argues that the minimum wage is a successful economic policy that is consistent with economic justice.

Suggested Citation

  • Robert Prasch & Falguni Sheth, 1999. "The Economics and Ethics of Minimum Wage Legislation," Review of Social Economy, Taylor & Francis Journals, vol. 57(4), pages 466-487.
    • Handle: RePEc:taf:rsocec:v:57:y:1999:i:4:p:466-487
    DOI: 10.1080/00346769900000017
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    References listed on IDEAS

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    1. Paul Davidson, 1994. "Post Keynesian Macroeconomic Theory," Books, Edward Elgar Publishing, number 124.
    2. Richard B. Freeman, 1994. "Working Under Different Rules," NBER Books, National Bureau of Economic Research, Inc, number free94-1.
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    Cited by:

    1. David Fairris & Gurleen Popli & Eduardo Zepeda, 2008. "Minimum Wages and the Wage Structure in Mexico," Review of Social Economy, Taylor & Francis Journals, vol. 66(2), pages 181-208.
    2. Bertoli, Paola & Grembi, Veronica & Morelli, Massimo & Rosso, Anna Cecilia, 2023. "In medio stat virtus? Effective communication and preferences for redistribution in hard times," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 105-147.
    3. Daniel Finn, 2003. "The moral ecology of markets: on the failure of the amoral defense of markets," Review of Social Economy, Taylor & Francis Journals, vol. 61(2), pages 135-162.
    4. Natàlia Cugueró-Escofet & Marion Fortin, 2022. "How Should We Distribute Rewards in Social Sustainable Organizations? Investigating Individual Preferences for Justice Allocation Norms," Sustainability, MDPI, vol. 14(3), pages 1-23, February.
    5. Robert E. Prasch, 2007. "Professor Lester and the Neoclassicals: The ‘Marginalist Controversy’ and the Postwar Academic Debate Over Minimum Wage Legislation: 1945-1950," Journal of Economic Issues, Taylor & Francis Journals, vol. 41(3), pages 809-825, September.
    6. Young Cheol Jung & Adian McFarlane & Anupam Das, 2021. "The effect of minimum wages on consumption in Canada," The Economic and Labour Relations Review, , vol. 32(1), pages 65-89, March.
    7. Leila Sabokkhiz & Fatma Guven Lisaniler & Ikechukwu D. Nwaka, 2021. "Minimum Wage and Household Consumption in Canada: Evidence from High and Low Wage Provinces," Sustainability, MDPI, vol. 13(12), pages 1-20, June.
    8. Ellen Mutari, 2004. "Brothers and Breadwinners: Legislating Living Wages in the Fair Labor Standards Act of 1938," Review of Social Economy, Taylor & Francis Journals, vol. 62(2), pages 129-148.

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