Neoclassical Economics and Federal Policies

Brigitte H. Bechtold
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Brigitte H. Bechtold: Sociology, Central Michigan University, Mt. Pleasant, MI, USA

Review of Radical Political Economics, 2014, vol. 46, issue 4, 496-501

Abstract: In the United States, commentators and politicians demonstrate a deep-rooted persistent adherence to a neoclassical model of the labor market, where a minimum wage increase is seen as an inevitable cause of unemployment, as it is assumed to occur at a point where the labor market was initially in equilibrium. The work of the Minimum Wage Study Commission (1981) uncovered the small size of the unemployment inflation effect, and the new minimum wage research also has corroborated this. Seen against these findings, the persistent rhetoric of sizeable “unemployment effects†of minimum wage increases simply shows the power of employers in a capitalist system. This paper suggests that counteracting the rhetoric is best done by recognizing the agency of the minimum wage worker and portraying this worker not as one who may “suffer unemployment†under a wage increase but who chooses to work fewer hours if hourly wages and benefits become sufficient.

Keywords: minimum wage; neoclassical model; unemployment; morality (search for similar items in EconPapers)
JEL-codes: E61 J23 J38 J59 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:sae:reorpe:v:46:y:2014:i:4:p:496-501

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