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It introduces economic theory using competitive versus noncompetitive labor-market benchmarks, emphasizing that outcomes depend on prevailing wages and market frictions.",{"@graph":14,"@context":73},[15,34,56],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/document/","Document",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/document/research-report/","Research & Report",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/document/the-minimum-wage-and-the-labor-market-economic-commentary/321919/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/the-minimum-wage-and-the-labor-market-economic-commentary/321919.png","ImageObject",300,407,{"name":42,"@type":43},"Levi","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-10-28","2026-09-21",true,{"@type":52,"interactionType":53,"userInteractionCount":55},"InteractionCounter",{"@type":54},"ViewAction",13,{"@type":57,"mainEntity":58},"FAQPage",[59,65,69],{"name":60,"@type":61,"acceptedAnswer":62},"What do proponents and opponents of the minimum wage argue?","Question",{"text":63,"@type":64},"Proponents argue minimum wage increases improve labor-market outcomes by reducing employers’ excessive market power. Opponents believe labor markets are competitive and wage regulation reduces employment, especially for low-skilled workers.","Answer",{"name":66,"@type":61,"acceptedAnswer":67},"How did the federal minimum wage change over time in the document?",{"text":68,"@type":64},"It was established in 1938 under the Fair Labor Standards Act, initially set at 25 cents per hour. The document notes later periodic increases and explains that real value declined from about 40% of the average private nonsupervisory wage to about 30%, before a 2007 bill raised it to $7.25 in phases.",{"name":70,"@type":61,"acceptedAnswer":71},"How does the document explain differing employment effects of minimum wage policy?",{"text":72,"@type":64},"It uses economic theories comparing competitive and noncompetitive labor-market structures. The effects are shown as depending on the prevailing market wage and the degree of frictions, so outcomes can differ across market conditions.","https://schema.org",{"og:url":32,"og:type":75,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":77,"canonical":32},"index,follow",{"doc_id":79,"site_id":7},321919,1790471554,{"code":4,"msg":82,"data":83},"success",[84,88,92,96,101,106,111,115,120,123,127],{"id":22,"doc_module":4,"doc_module_name":25,"category_name":85,"show_sort_weight":86,"slug":87},"Story & Novel",90,"story-novel",{"id":26,"doc_module":4,"doc_module_name":25,"category_name":89,"show_sort_weight":90,"slug":91},"Literature",80,"literature",{"id":33,"doc_module":4,"doc_module_name":25,"category_name":93,"show_sort_weight":94,"slug":95},"Exam",70,"exam",{"id":97,"doc_module":4,"doc_module_name":25,"category_name":98,"show_sort_weight":99,"slug":100},5,"Comic",60,"comic",{"id":102,"doc_module":4,"doc_module_name":25,"category_name":103,"show_sort_weight":104,"slug":105},6,"Technology",50,"technology",{"id":107,"doc_module":4,"doc_module_name":25,"category_name":108,"show_sort_weight":109,"slug":110},7,"Healthcare",40,"healthcare",{"id":112,"doc_module":4,"doc_module_name":25,"category_name":29,"show_sort_weight":113,"slug":114},8,30,"research-report",{"id":116,"doc_module":4,"doc_module_name":25,"category_name":117,"show_sort_weight":118,"slug":119},9,"Religion & Spirituality",20,"religion-spirituality",{"id":118,"doc_module":4,"doc_module_name":25,"category_name":121,"show_sort_weight":118,"slug":122},"World Cup","world-cup",{"id":124,"doc_module":4,"doc_module_name":25,"category_name":125,"show_sort_weight":124,"slug":126},10,"Lifestyle","lifestyle",{"id":128,"doc_module":4,"doc_module_name":25,"category_name":129,"show_sort_weight":97,"slug":130},19,"General","general",{"code":4,"msg":82,"data":132},{"doc_id":79,"user_id":133,"nickname":42,"user_avatar":134,"doc_module":4,"category_id":112,"category_name":29,"doc_title":10,"doc_description":12,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":55,"is_deleted":4,"is_public":22,"is_downloadable":22,"audit_status":22,"page_count":107,"language":140,"language_code":8,"site_id":7,"html_lang":8,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":12,"update_tm":144,"read_time":145,"preview_page_count":4},7971461740909,"https://ap-avatar.wpscdn.com/davatar_155a257f0dc6eb9ab79c44ca47cae57d","# The Minimum Wage and the Labor Market\n\nby Guillaume Rocheteau and Murat Tasci  \nThne fecderal mininum wage wisestablished in 1938 by the Fair LaborStandards Act.Initially sct at 25centsan hour.the wage has heen raised periodically to reflect changes in inflationand productivity.  \nTo assess whether the recent inereascin the minimum wage is exeessive ornoLone nust know whal it is intendedto achieve.The wage's proponentshave argued that it exerts positiveeffects on labor market outcomes byreducing employers excessive marketpower.Its opponents.however.belietethat labor markcts are compctitive andany wage regulation is bound to reduceemploynient.especially anong low-skilled workers.  \nFrom September 1997 to the begin-ming of2007.the minimum wage stoudat S5.15 an hour.but its real valuedeclined steadily from about 40 per-cent of the average private nonsuper-Visory wage to a mere 30 percent.Adjusted for inflation,the minimumwage was lower at the beginning of2007 than at any time sinee 1955(sce figure 1).Meanwhile.the wagelfected fewer people.as the frac-tion of hourly workers who caned nomore than the minimum dropped Ironaround 15 pereent in 1980 to just  \nThis debate can be clarified with theaid ofeconomic thcores that analyzethe effiecis of the minimuinwagc on thelabor market.These theories can help usinswer qjuestions such as:Does a min-mum wage necessarily increase unem-ployment?Does it expuind the num-her of pcople participating in the laborforce?Does it improve social welfare?  \n2.2 percent in 2006.On May 24.2007,Congress passed a bill raisingthe federal minimum wage toS7.25 inthree phases over two years.  \nFIGURE.1 FEDERAL.MINIMUM WAGEANDWORKERS ATOR BELOW IT  \nNew models ofemployment showthat there are sone cases in whichminimm wage ean have pusiliveefeers on employment and scialwelfare.Ihe effects depend ultimately on the prevailing marketwage and the frictions in the markel,Evidence to date does aof suppnrtthe view that raising the mininumwage will lead to positive empliy-ment effects.  \n图Copetitive andNoneompetitive LabrMarkets  \nThe effeet of a minimm wage depends.in part,on whether ihe kthor murketis compelitive ornotin whichr caisecmployer excrt signticant poweroyerwage decisions.We review the employnient eflects of the mininum wagetinder twoextreme assumplrons:n thelirst case,there are a lot ofempliryerscompeting to allraict workers.in the seond.there is a single cmplvyer.Iheseextremes give us two benchmarks fnimwhich we can discuss specific situatiiisnd markets.  \nAperleetly compettise fabor market is1 conposite of mmy fims thal are ilcompeition for workers.Firms have nhpower to sct wages:the market deter-mines a competitive wage.If a fimdeviautes from this wage.it eiher puysless and loses workers or paiys more.SUStas lossusand exis the market.  \nAt the otherextreme is a lahormarktthat is a collection ofsmall localmarkets.In each local market.somelins are in a domnant hiring pusilionthink of a large retailer near a small  \nMAY 1  \n2007  \n# ecONOMICCOMMCNTCIRY\n\nThe Minimum Wage and the Labor Market  \nby Guillaume Rocheteau and Murat Tasci  \nThe federal minimum wage wasestablished in 1938 by the Fair LaborStandards Act.Initially set at 25 centsan hour,the wage has been raised peri-odically to reflect changes in inflationand productivity.  \nTo assess whether the recent increasein the minimum wage is excessive ornot,one must know what it is intendedto achieve.The wage's proponentshave argued that it exerts positiveeffects on labor market outcomes byreducing employers'excessive marketpower.Its opponents,however,believethat labor markets are competitive andany wage regulation is bound to reduceemployment,especially among low-skilled workers.  \nFrom September 1997 to the begin-ning of 2007,the minimum wage stoodat $5.15 an hour,but its real valuedeclined steadly from about 40 per-cent o the average private nonsuper-visory wage to a mere 30 percent.Adjusted for inflation,the minimumwage was lower at the beginning of2007 th","cbCaikM91WtQRqGX","https://ap.wps.com/l/cbCaikM91WtQRqGX","pdf",1385407,"English","# ■ Competitive andNoncompetitive LaborMarkets","[{\"question\":\"What do proponents and opponents of the minimum wage argue?\",\"answer\":\"Proponents argue minimum wage increases improve labor-market outcomes by reducing employers’ excessive market power. Opponents believe labor markets are competitive and wage regulation reduces employment, especially for low-skilled workers.\"},{\"question\":\"How did the federal minimum wage change over time in the document?\",\"answer\":\"It was established in 1938 under the Fair Labor Standards Act, initially set at 25 cents per hour. The document notes later periodic increases and explains that real value declined from about 40% of the average private nonsupervisory wage to about 30%, before a 2007 bill raised it to $7.25 in phases.\"},{\"question\":\"How does the document explain differing employment effects of minimum wage policy?\",\"answer\":\"It uses economic theories comparing competitive and noncompetitive labor-market structures. The effects are shown as depending on the prevailing market wage and the degree of frictions, so outcomes can differ across market conditions.\"}]","The Minimum Wage and the Labor Market - Economic Commentary | PDF",1789960568,18]