abstract: 'A firm''s ability to adjust its production process to economize on

  low-skilled labor when faced with a minimum wage increase will differ

  greatly depending on industry or occupation. For example, more

  capital-intensive means of cleaning hotel rooms or serving customers at

  restaurants may not be readily available without degrading service

  quality. In such situations, the productivity of labor is essentially

  capped, and firms have few options when the minimum wage increases. This

  simple observation has implications for studies that rely on microdata

  to examine the effects of minimum wage increases. If firms only increase

  prices in response to a minimum wage increase, Employment effects are

  likely small. If the goal of the minimum wage is to redistribute income

  from firms and consumers to workers, minimum-wage increases targeted at

  industries and occupations where such rigidities result in an inelastic

  demand for labor may achieve the desired goal at a lower cost than

  across-the-board increases. However such a scheme causes an inefficient

  allocation of labor and would be subjected to substantial political

  pressures that may lead to anomalous results. Additionally, it is

  unreasonable to conclude that policy makers have the necessary

  information to skillfully set the minimum wage.'
affiliation: 'Wimmer, BS (Corresponding Author), Univ Nevada, Las Vegas, NV 89154
  USA.

  Univ Nevada, Las Vegas, NV 89154 USA.'
author: Wimmer, BS
author_list:
- family: Wimmer
  given: BS
da: '2023-09-28'
doi: 10.1007/s12122-000-1038-8
files: []
issn: 0195-3613
journal: JOURNAL OF LABOR RESEARCH
keywords-plus: EMPLOYMENT; LABOR; LAWS; INEQUALITY; WORKERS
language: English
month: FAL
number: '4'
number-of-cited-references: '38'
pages: 649-668
papis_id: 0d6cbc828cb4f8e07319bcb461cb0ed4
ref: Wimmer2000minimumwage
times-cited: '4'
title: The minimum wage and productivity differentials
type: article
unique-id: WOS:000088318500010
usage-count-last-180-days: '0'
usage-count-since-2013: '10'
volume: '21'
web-of-science-categories: Industrial Relations \& Labor
year: '2000'