Minimum Wage Effect

Hal R. Varian provides access to the Works of James K. Galbraith and Travis Hale .
(UTIP No.11) provides the following comment:

In this paper we show that inequality and unemployment are related positively across the European continent, within countries, between countries and through time. This contradicts the often-repeated view that unemployment in Europe is attributable to rigid wage structures, high minimum wages and generous social welfare systems. In fact, countries that possess the low inequality such systems produce experience less unemployment than those that do not. Moreover, large inter-country inequalities across Europe aggravate the continental unemployment problem. There is no paradox in low American unemployment. It stems in part from that country’s continent-wide programs of redistribution, including the Social Security System, the Earned Income Tax Credit, the federal minimum wage, and a uniform regime of monetary policy geared toward full employment, all of which reduce inter-regional inequality and all of which we recommend for adoption by the European Union

This is an older Paper (1998), but the intrinsic thesis that Minimum Wages increases and provision of Welfare services actually increase Employment, due to the fact that it increases the Opprotunity Cost of leaving Low-Wage Employment, seems sound.

Greg Mankiw makes a better argument for equalization of the Rich cross-Country, than for a reduction of Inequality, as the Source he cites confirms that In-Country Inequality is growing almost everywhere.

Baseline: There is undoubted increased Inequality, though the universality of the Trends throughout the World simply indicate the integration of the World Economy. The invection of Conservatives against current Welfare programs, on the other hand, actually works to their disadvantage; promoting Immigration (consistent with longterm increase of Welfare Costs) and increasing Labor mobility (consistent with rising Wage demands). lgl