Wish

Evolution of conceptual argumentation pertaining to statutory minimum wage

5. The long-standing mainstream argumentation against imposition of statutory minimum wage can be summarised as follows. First, for the covered sectors, the loss in employment thus resulted could outweigh the gains by those minimum wage workers still in employment. Secondly, unless the low-pay workers belong to the poor households, the statutory minimum wage might end up benefiting low-wage members of better-off households. Thirdly, the surplus labour generated from the covered sectors could depress wages in the uncovered sectors, thereby offsetting any poverty alleviation gains in the covered sectors. If the whole economy were covered, higher overall unemployment would result.

6. In recent years, some empirical studies have tried to resurrect the case for statutory minimum wage, by alluding to economic efficiency instead of poverty alleviation grounds. A modern theory of "dynamic monopsony" was advanced...