ECONOMICS IN ACTIONSo what conclusions can we draw about the minimum wage?
•In their book, Myths and Measurement, economists David Card and Alan Kreuger explain a number of reasons why this might be the case.
1For example, think of a small town with only one fast food restaurant (although there are other non-wage characteristics that one could think of).In such cases, a minimum wage actually raisesemployment, which runs directly counter to the basic economic intuition of a price floor!1V. Bhaskar and T. To (1999). “Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monosponistic Competition,” The Economic Journal 109(455), pp. 190-203.