Does the Minimum Wage Increase Productivity?

November 29th, 2012 Leave a comment Go to comments

This Galbraith article – pointing to Ron Unz’s ongoing good thinking on the topic, got me thinking:

If employers are faced with higher wage rates, that gives them more incentive to invest in business capital that 1. makes workers more efficient and productive, and 2. reduces the number workers they need.

Is this incentive effect figured into the analyses of minimum-wage effects that you’ve seen? I haven’t laid eyes on such a thing, but my knowledge of the literature is far from comprehensive.

Cross-posted at Angry Bear.

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