1. Textbook
Chapter 6
2. Read Lecture Slides
3. Extra Redings
1. Course Video – Minimum Wage (you can find this in the video section) . This is a combination of news items.
Summary-
Good Intentions – Minimum Wage in the US
– In 1961 Congress began to enact laws that increased the minimum wag
– In the 1950s the minimum wage was $1.00/hr effective minimum wage $4/hr 1984
o Effective minimum wage -> Minimum Wage + Pay Roll Taxes + Social Security -> $4.00 in 1982.
– Adverse effects of the Minimum Wage
o If employers didn’t have to pay minimum wage they could hire more young, unskilled workers
o There is a correlation between the Minimum Wage going up and unemployment amongst young African Americans
– min wage/unemployment rate of young African Americans
- 1984 – $1.00/13%
- 1964 – $1.15/25%
- 1974 – $2.00/39%
- 1984 – $3.35/50%
- Can causation be inferred from this correlation?
- Video claims causation
- Video suggests that high black crime rates are due to young African Americans not being able to attain jobs due to the minimum wage.
- Can a causal link be inferred here?
2. Video on Rent Ceiling (you can also find this in the video section)
The Video Tutorial: Welfare Analysis -A Price Ceiling.
CASE STUDIES
1. Price Ceiling: Rent Ceiling
2. Price Floor: Minimum Wage