What Kind Of Science Did David Ricardo'S Theory Called The Iron Law Of Wages Come To Be Called?

What Kind Of Science Did David Ricardo’S Theory Called The Iron Law Of Wages Come To Be Called?

What Kind Of Science Did David Ricardo
According to David Ricardo`s Iron Law of Wages D avid Ricardo (1772-1823), an English banker, was also an important economist. His best-known argument was that wages “naturally” tended towards a minimum level equal to the minimum subsistence level of workers.

The appeal of this idea to factory owners is obvious.
This also influenced Marx in his early pessimistic views on the possibility that workers would profit from capitalism.
Ricardo`s views on the “theory of the value of labor” were also important in Marx`s economic thought.
When the price of the labor market is lower than its natural price, the condition of the workers is the most pathetic: then poverty deprives them of those amenities that custom makes absolutely necessary.

Only after their deprivations have reduced their number or the demand for labour has increased, the price of the labour market will reach its natural price, and the worker will have the moderate comfort that the natural wage rate will provide. As the English political economist David Ricardo noted, this prediction would not come true as long as new investments, technologies or any other factor led to faster growth in the demand for labor than the population: in this case, real wages and population would increase over time.

The demographic transition (a transition from high birth and death rates to low birth and death rates as a result of a country`s industrialization) has changed this dynamic in most developed countries, resulting in wages much higher than living wages. Even in countries that still have rapidly growing populations, the need for skilled labour in some occupations means that some wages are rising much faster than others.

✦ Unrealistic wage adjustment Ricardo`s theory was based on adjusting wages over a generation and not over each year. Critics argue that this theory ignores the annual fluctuations in labor prices. The reason for this was that if wages are higher, the supply of labour will increase relative to demand, which will lead to oversupply and thus a fall in real wages in the market; If wages are lower, labour supply will decrease and real wages in the market will rise.

This would create a dynamic convergence towards a wage-subsistence equilibrium with a constant population in accordance with the theory of supply and demand.
The content of the Iron Wage Act was attributed to economists who used to write under the name Lassalle.
For example, Antonella Stirati notes that Joseph Schumpeter claimed that Anne-Robert-Jacques Turgot first formulated the concept.

Some (e.g. John Kenneth Galbraith) attribute the idea to David Ricardo. According to Terry Peach, economists who interpret Ricardo as a more flexible view of wages include Haney (1924), J.R. Hicks (1973), Frank Knight (1935), Ramsay (1836), George Stigler (1952), and Paul Samuelson (1979).

She sees Ricardo, for example, closer to the more flexible visions of population that were characteristic of economists before Malthus. Theorist Henry George noted that Ricardo`s rent law does not imply that lowering wages on livelihoods is an immutable fact, but rather points the way to reforms that could significantly increase real wages, such as a property value tax.

Ricardo distinguished between a natural price and a market price. For Ricardo, the natural price of labor was the price of maintaining the worker. Ricardo believed, however, that the labor market price or wages actually paid could exceed the natural wage level indefinitely due to opposing economic trends: the Iron Law of Wages is a proposed economic law that states that long-run real wages always tend toward the minimum wage necessary to sustain the worker`s life.

The theory was first named by Ferdinand Lassalle in the mid-nineteenth century. Karl Marx and Friedrich Engels attribute the teaching to Lassalle (notably in Marx`s Critique of The Gotha Program of 1875), the idea of Thomas Malthus` Essay on the Population Principle, and Goethe`s terminology of the “great and eternal laws of iron” in The Divine.

The fact that employees can also strike alone and compete with their employers requires that wages be high enough to discourage workers. Workers enter and stay in a field because of the wages offered. Booming industries offer higher wages and force other industries to pay more to retain workers as long as labor supply does not exceed demand.

The lessons were typical of his Iron Wages Act, which stipulated that all attempts to improve workers` real incomes were futile and that wages would inevitably remain close to subsistence level. « The rise or fall of wages is common to all conditions of society, whether stationary, progressive or in decline.

» David Ricardo The Iron Law of Wages is a theory of classical economics that claims that real wages (wages proportional to the amount of goods and services they can buy) are always heading towards the minimum wage necessary for the long-term survival of a worker and his family.

When the price of the labor market exceeds its natural price, the worker`s condition flourishes and is happy that he has in his power to control more of the necessities and pleasures of life, and thus to found a healthy and large family.
However, when the encouragement that high wages give to population growth increases the number of workers, wages fall back to their natural price and sometimes even fall below it due to a reaction.

To answer the question of why wages could fall towards a living minimum, Ricardo introduced the rent law. Ricardo and Malthus discussed this concept in a long personal correspondence. It is incomprehensible that the natural price of labor, estimated even in terms of food and necessities, is absolutely fixed and constant.

It varies at different times in the same country and is very different in different countries. It basically depends on people`s habits and customs. An English worker would consider his wages to be lower than his natural tariff and too sparse to feed a family if they allowed him not to buy food other than potatoes and not to live in a better dwelling than a mud hut; Yet these moderate demands of nature are often considered sufficient in countries where “man`s life is cheap” and where his desires can be easily satisfied.

Many of the amenities now enjoyed in an English cottage would have been considered luxury in an earlier period of our history. According to Alexander Gray, Ferdinand Lassalle has “the merit of having coined the expression of the `iron law of wages`, as Lassalle wrote about `the iron and cruel law`.

The rise and fall of the price of labor, according to its supply and demand, would then turn into a vicious circle from which the poor working class would suffer the most.
Even if any increase in investment capital caused an increase in the price of the labor market, it would always lean more towards the natural price of labor, because the prices of essential goods also rise as more and more labor is needed to produce enough to support the growing population.

According to Ricardo, this is the iron law of wages. Many modern economists believe that companies pay their workers a premium above the subsistence level to make them more efficient. In efficiency wage theory, companies pay compensation wages above the market to create incentives for employees and reduce turnover of experienced employees.

Socialist critics of Lassalle and the so-called Iron Wages Act, such as Karl Marx, argued that while there was a tendency to lower wages to the subsistence level, there were also tendencies that operated in opposite directions. Marx criticized the Malthusian basis of the Iron Wages Act. According to Malthus, humanity is largely destined to live in poverty because an increase in productive capacity leads to an increase in population.

Marx criticized Lassalle for misunderstood David Ricardo. Marx also noted that the basis of what he called “modern political economy” requires a certain order of magnitude for the theory of value only for wages. : According to David Ricardo`s Iron Law of Wages

What was David Ricardo’s iron law of wages?

formulation by Ricardo –

What Kind Of Science Did David Ricardo In David Ricardo doctrines were typified in his Iron Law of Wages, which stated that all attempts to improve the real income of workers were futile and that wages perforce would remain near the subsistence level.

What was David Ricardo’s theory?

comparative advantage, economic theory, first developed by 19th-century British economist David Ricardo, that attributed the cause and benefits of international trade to the differences in the relative opportunity costs (costs in terms of other goods given up) of producing the same commodities among countries.

In Ricardo’s theory, which was based on the labour theory of value (in effect, making labour the only factor of production), the fact that one country could produce everything more efficiently than another was not an argument against international trade. In a simplified example involving two countries and two goods, if country A must give up three units of good x for every unit of good y produced, and country B must give up only two units of good x for every unit of good y, both countries would benefit if country B specialized in the production of y and country A specialized in the production of x.

B could then exchange one unit of y for between two and three units of x (before trade, country B would have only two units of x), and A could receive between one-third and one-half units of y (before trade, country A would have only one-third unit of y) for every unit of x.

This is true even though B may be absolutely less efficient than A in the production of both commodities.
The theory of comparative advantage provides a strong argument in favour of free trade and specialization among countries.
The issue becomes much more complex, however, as the theory’s simplifying assumptions—a single factor of production, a given stock of resources, full employment, and a balanced exchange of goods—are replaced by more-realistic parameters,

The Editors of Encyclopaedia Britannica This article was most recently revised and updated by Adam Augustyn,

What did Ricardo believe about wages?

Modern History Sourcebook: David Ricardo: The Iron Law of Wages, 1817 David Ricardo (1772-1823), an English banker was also an important early economist. His most well-known argument was that wages “naturally” tended towards a minimum level corresponding to the subsistence needs of the workers.

The attraction of this idea for factory owners is evident. It also influenced Marx in his early pessimistic views about the possibility of workers benefiting from capitalism. Ricardo’s views on the “labor theory of value” were also important in Marx’s economic thought. From David Ricardo. On Wages Money, from its being a commodity obtained from a foreign country, from its being the general medium of exchange between all civilized countries, and from its being also distributed among those countries in proportions which are ever changing with every improvement in commerce and machinery, and with every increasing difficulty of obtaining food and necessaries for an increasing population, is subject to incessant variations.

In stating the principles which regulate exchangeable value and price, we should carefully distinguish between those variations which belong to the commodity itself, and those which are occasioned by a variation in the medium in which value is estimated, or price expressed.

A rise in wages, from an alteration in the value of money, produces a general effect on price, and for that reason it produces no real effect whatever on profits.
On the contrary, a rise of wages, from the circumstance of the labourer being more liberally rewarded, or from a difficulty of procuring the necessaries on which wages are expended, does not, except in some instances, produce the effect of raising price, but has a great effect in lowering profits.

In the one case, no greater proportion of the annual labour of the country is devoted to the support of the labourers; in the other case, a larger portion is so devoted. Labour, like all other things which are purchased and sold, and which may be increased or diminished in quantity, has its natural and its market price.

The natural price of labour is that price which is necessary to enable the labourers, one with another, to subsist and to perpetuate their race, without either increase or diminution.
The power of the labourer to support himself, and the family which may be necessary to keep up the number of labourers, does not depend on the quantity of money which he may receive for wages, but on the quantity of food, necessaries, and conveniences become essential to him from habit, which that money will purchase.

The natural price of labour, therefore, depends on the price of the food, necessaries, and conveniences required for the support of the labourer and his family. With a rise in the price of food and necessaries, the natural price of labour will rise; with the fall in their price.

The natural price of labour will fall.
With the progress of society the natural price of labour has always a tendency to rise, because one of the principal commodities by which its natural price is regulated, has a tendency to become dearer, from the greater difficulty of producing it.
As, however, the improvements in agriculture, the discovery of new markets, whence provisions may be imported, may for a time counteract the tendency to a rise in the price of necessaries, and may even occasion their natural price to fall, so will the same causes produce the correspondent effects on the natural price of labour.

The natural price of all commodities, excepting raw produce and labour, has a tendency to fall, in the progress of wealth and population; for though, on one hand, they are enhanced in real value, from the rise in the natural price of the raw material of which they are made, this is more than counterbalanced by the improvements in machinery, by the better division and distribution of labour, and by the increasing skill, both in science and art, of the producers.

The market price of labour is the price which is really paid for it, from the natural operation of the proportion of the supply to the demand; labour is dear when it is scarce, and cheap when it is plentiful. However much the market price of labour may deviate from its natural price, it has, like commodities, a tendency to conform to it.

It is when the market price of labour exceeds its natural price, that the condition of the labourer is flourishing and happy, that he has it in his power to command a greater proportion of the necessaries and enjoyments of life, and therefore to rear a healthy and numerous family.

When, however, by the encouragement which high wages give to the increase of population, the number of labourers is increased, wages again fall to their natural price, and indeed from a reaction sometimes fall below it.
When the market price of labour is below its natural price, the condition of the labourers is most wretched: then poverty deprives them of those comforts which custom renders absolute necessaries.

It is only after their privations have reduced their number, or the demand for labour has increased, that the market price of labour will rise to its natural price, and that the labourer will have the moderate comforts which the natural rate of wages will afford.

Notwithstanding the tendency of wages to conform to their natural rate, their market rate may, in an improving society, for an indefinite period, be constantly above it; for no sooner may the impulse, which an increased capital gives to a new demand for labour, be obeyed, than another increase of capital may produce the same effect; and thus, if the increase of capital be gradual and constant, the demand for labour may give a continued stimulus to an increase of people.

Thus, then, with every improvement of society, with every increase in its capital, the market wages of labour will rise; but the permanence of their rise will depend on the question, whether the natural price of labour has also risen; and this again will depend on the rise in the natural price of those necessaries on which the wages of labour are expended.

As population increases, these necessaries will be constantly rising in price, because more labour will be necessary to produce them. If, then, the money wages of labour should fall, whilst every commodity on which the wages of labour were expended rose, the labourer would be doubly affected, and would be soon totally deprived of subsistence.

Instead, therefore, of the money wages of labour falling, they would rise; but they would not rise sufficiently to enable the labourer to purchase as many comforts and necessaries as he did before the rise in the price of those commodities. These, then, are the laws by which wages are regulated, and by which the happiness of far the greatest part of every community is governed.

Like all other contracts, wages should be left to the fair and free competition of the market, and should never be controlled by the interference of the legislature.
The clear and direct tendency of the poor laws is in direct opposition to these obvious principles: it is not, as the legislature benevolently intended, to amend the condition of the poor, but to deteriorate the condition of both poor and rich; instead of making the poor rich, they are calculated to make the rich poor; and whilst the present laws are in force, it is quite in the natural order of things that the fund for the maintenance of the poor should progressively increase till it has absorbed all the net revenue of the country, or at least so much of it as the state shall leave to us, after satisfying its own never-failing demands for the public expenditure.

This pernicious tendency of these laws is no longer a mystery, since it has been fully developed by the able hand of Mr. Malthus; and every friend to the poor must ardently wish for their abolition. From The Works of David Ricardo, J.R. McCulloch, ed. (London: John Murray, 1881), pp.31, 50-58.

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Why is the subsistence wage theory called the iron law of wage?

Subsistence theory – Subsistence theories emphasize the supply aspects of the labour market while neglecting the demand aspects. They hold that change in the supply of workers is the basic force that drives real wages to the minimum required for subsistence (that is, for basic needs such as food and shelter).

Elements of a subsistence theory appear in The Wealth of Nations, where Smith wrote that the wages paid to workers had to be enough to allow them to live and to support their families.
The English classical economists who succeeded Smith, such as David Ricardo and Thomas Malthus, held a more pessimistic outlook.

Ricardo wrote that the “natural price” of labour was simply the price necessary to enable the labourers to subsist and to perpetuate the race. Ricardo’s statement was consistent with the Malthusian theory of population, which held that population adjusts to the means of supporting it.

Subsistence theorists argued that the market price of labour would not vary from the natural price for long: if wages rose above subsistence, the number of workers would increase and bring the wage rates down; if wages fell below subsistence, the number of workers would decrease and push the wage rates up.

At the time that these economists wrote, most workers were actually living near the subsistence level, and population appeared to be trying to outrun the means of subsistence. Thus, the subsistence theory seemed to fit the facts. Although Ricardo said that the natural price of labour was not fixed (it could change if population levels moderated in relation to the food supply and other items necessary to maintain labour), later writers were more pessimistic about the prospects for wage earners.

What is the meaning of iron law?

Noun. : a law or controlling principle that is incontrovertible and inexorable.

When was the Iron Law of Wages made?

The ‘iron (or brazen) law of wages’ is a term invented by Ferdinand Lassalle ( 1862 ) to describe the inexorable tendency of real wages under capitalism to adhere to a level just sufficient to afford the bare necessities of life.

What did David Ricardo contribute to economics?

David Ricardo David Ricardo (1772-1823) was one of the greatest theoretical economists of all time. The third child of Abigail and Abraham (a prosperous Jewish stockbroker who had emigrated to London from Holland), Ricardo attended school in London and Amsterdam and at the age of fourteen entered his father’s business.

In 1793 he married a Quaker, Priscilla Wilkinson, with whom he was to have eight children.
The couple’s different religious backgrounds meant that the marriage created a rift with both their families, and Ricardo was forced to set up independently as a broker on the London Stock Exchange.
Ricardo, though, prospered in the financial business to a far greater extent than his father, amassing a fortune of about £700,000 (equivalent to approximately £40 million today).

Ricardo became interested in economics in 1799 after, apparently by chance, reading the work of Adam Smith. He subsequently published pamphlets and articles analyzing various economic problems of the day, including the stability of the currency and the national debt.

After some struggle (“I fear the undertaking exceeds my powers,” he wrote), his classic work, The Principles of Political Economy, appeared in 1817. Two of Ricardo’s most important contributions were the theory of rent and the concept of comparative advantage. The former, which drew on the writings of (among others) his close friend and critic Robert Malthus, defined rent as “that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil.” Rent, Ricardo argued, is what remains from gross farm revenue after all the farmer’s production costs have been paid, including remuneration for the capital and labor he had expended on the land.

It is an unearned surplus (now referred to as an economic rent) in that its payment is not necessary to ensure a supply of farmland. For Ricardo, rent arises from the advantages that one site has over another due to differing degrees of soil fertility: rent per acre is highest on the most fertile land, and declines to zero on the worst quality soil.

Comparative advantage, Ricardo believed, ensured that international trade would bring benefits for all countries; his theory remains the foundation of the economic case for free trade today. He argued that each country should specialize in making the products in which it possessed a comparative advantage, that is could produce relatively efficiently.

Portuguese sunshine, for example, gave Portuguese entrepreneurs a comparative advantage in producing wine, whereas England’s wet climate meant that her comparative advantage was in making cloth. Ricardo showed that, by specializing in production and then trading, Portugal and England would each achieve greater consumption of both wine and cloth than in the absence of international trade.

What did David Ricardo argue?

David Ricardo, 1772-1823 – The brilliant British economist David Ricardo was one the most important figures in the development of economic theory. He articulated and rigorously formulated the ” Classical” system of political economy. The legacy of Ricardo dominated economic thinking throughout the 19th Century.

David Ricardo’s family was descended from Iberian Jews who had fled to Holland during a wave of persecutions in the early 18th Century. His father, a stockbroker, emigrated to England shortly before Ricardo’s birth in 1772. David Ricardo was his third son (out of seventeen!). At the age of fourteen, after a brief schooling in Holland, Ricardo’s father employed him full-time at the London Stock Exchange, where he quickly acquired a knack for the trade.

At 21, Ricardo broke with his family and his orthodox Jewish faith when he decided to marry a Quaker. However, with the assistance of acquaintances and on the strength of his already considerable reputation in the City of London, Ricardo managed to set up his own business as a dealer in government securities.

He became immensely rich in a very short while. In 1814, at the age of 41, finding himself “sufficiently rich to satisfy all my desires and the reasonable desires of all those about me” (Letter to Mill, 1815), Ricardo retired from city business, bought the estate of Gatcomb Park and set himself up as a country gentleman.

Egged on by his good friend James Mill, Ricardo got himself elected into the British parliament in 1819 as an independent representing a borough in Ireland, which he served up to his death in 1823. In parliament, he was primarily interested in the currency and commercial questions of the day, such as the repayment of public debt, capital taxation and the repeal of the Corn Laws.

(cf. Thomas Moore’s poems on Cash, Corn and Catholics ) Ricardo’s interest in economics was sparked by a chance reading of Adam Smith ‘s Wealth of Nations (1776) when he was in his late twenties. Bright and talkative, Ricardo discussed his own economic ideas with his friends, notably James Mill, But it was only after the persistent urging of the eager Mill that Ricardo actually decided to write them down.

He began in 1809, authoring newspaper articles on currency questions which drew him into the great Bullionist Controversy that was raging at the time In that affair, he was a partisan of the Bullionist position, which argued for the resumption of the convertibility of paper money into gold.

He wrote a pair of tracts (1810, 1811) articulating their arguments and outlining what has since become known as the “classical approach” to the theory of money.
In these very same tracts, Ricardo also suggested the impossibility of a ” general glut ” – an excess supply of all goods – in an economy.
This provoked the Rev.

Thomas Robert Malthus to respond to Ricardo. The course of this debate continued in their extensive correspondence with each other, culminating in a series of notes Ricardo wrote on Malthus’s 1820 Principles (these were later published posthumously as Notes on Malthus ).

Ricardo stood firm in his support of Say’s Law and dismissed Malthus’s underconsumption thesis as theoretically impossible.
Yet, in spite of their disagreements on economic doctrines, they took to each other personally and fostered a legendary friendship.
Ricardo even passed on investment tips to Malthus – the most famous case being when Ricardo urged Malthus to invest in the bond market in anticipation of a British victory at Waterloo.

Ever the conservative parson, Malthus declined. Ricardo, as usual, made a killing. In 1815, Ricardo published his groundbreaking Essay on.Profits, There he introduced the differential theory of rent and the “law of diminishing returns” to land cultivation.

Coincidentally, this principle was discovered simultaneously and independently by Malthus, Robert Torrens and Edward West, (more astoundingly, all of them published their tracts within three weeks in February, 1815!) In his 1815 Essay, Ricardo formulated his theory of distribution in a one-commodity (“corn”) economy.

With wages at their “natural” level, Ricardo argued that rate of profit and rents were determined residually in the agricultural sector. He then used the concept of arbitrage to claim that the agricultural profit and wage rates would be equal to the counterparts in industrial sectors.

With this theory, he could show that a rise in wages did not lead to higher prices, but merely lowered profits. Arguably, a proper theory of value was missing in the 1815 tract. In a one-commodity model, this is not an big issue. But, prodded on by Malthus ‘s criticisms, Ricardo realized that in a multiple-commodity economy, for rents and profits to remain residuals, then prices must be pinned down somewhere.

In his formidable treatise, Principles of Political Economy and Taxation (1817), Ricardo finally articulated and integrated a theory of value into his theory of distribution. For Ricardo, the appropriate theory was the “labor-embodied” theory of value or LTV, i.e.

The argument that the relative “natural” prices of commodities are determined by the relative hours of labor expended in their production.
Indeed, he began his 1817 book by criticizing Adam Smith ‘s alternatives – the “labor-commanded” and “adding up” theories of value – because, he argued, that made value a function of wages and thus income distribution.

For Ricardo, this was untenable. In his vision, value was independent of distribution, and thus only the “labor-embodied” theory made sense. However, Ricardo realized that when the question of capital comes in, a problem arose: specifically, as different industries apply different amounts of capital per laborer, then the rate of profit will also differ across industries.

Ricardo understood that if he then assumed that the rates of profit across different industries were equalized (as free competition would imply), then, mathematically, relative prices would now vary with wages – exactly what he had criticized Smith for! Ricardo realized that the labor theory of value would only work if the degree of capital-intensity was the same across all sectors, casting doubt on the generality of his cherished theory.

Ricardo proposed two ways out of this dilemma. The first was the empirical argument that firms apply capital in a roughly proportional manner to the amount of labor invested. In this case, the resulting prices when profits are equalized would not differ much from the values implied by the LTV.

This is what Stigler (1958) has called Ricardo’s “93% labor theory of value”.
The second solution was to find a commodity which has the average capital per worker, so that its price would reflect labor-embodied value and thus not vary with changes in distribution.
He called this the “invariable standard of value”,

If one can find what this “standard” commodity is, Ricardo argued, then the rest of the analysis is simple. One can, say, change technology, trace the change in value of the standard commodity, and then extrapolate the change in value for all other commodities by the degree to which their capital composition deviates from this standard.

Despite his search, Ricardo never found this standard commodity. On his death, an incomplete paper entitled “The Invariable Standard of Value” was found on his desk. Eventually, Karl Marx (1867) proposed one way out of it, but the proper solution would have to wait until Piero Sraffa (1960). A little tripped up on value, Ricardo (1817) pressed on nonetheless.

With prices (more or less) pinned down by the LTV, he restated his old theory of distribution. Dividing the economy into classes of landowners (who spend their rental income on luxuries), workers (who spend their wage income on necessities) and capitalists (who save most of their profit income and reinvest it), Ricardo argued showed once again how the size of profits is determined residually by the extent of cultivation on land and the historically-given real wage.

He then added on a theory of growth,
Specifically, with profits determined in the manner given above, then the amount of capitalist saving, accumulation and labor demand growth could also be deduced.
This, in turn, would increase population and thus bring more land, of less and less quality, into cultivation.

As the economy continued to grow, then, by his theory of distribution, profits would be eventually squeezed out by rents and wages. In the limit, Ricardo argued, a “stationary state” would be reached where capitalists will be making near-zero profits and no further accumulation would occur.

Ricardo suggested two things which might hold this law of diminishing returns at bay and keep accumulation going at least for a while: technical progress and foreign trade.
On technical progress, Ricardo was ambivalent.
One the one hand, he recognized that technical improvements would help push the marginal product of land cultivation upwards and thus allow for more growth.

But, in his famous Chapter 31 “On Machinery” (added in 1821 to the third edition of his Principles ), he noted that technical progress requires the introduction of labor-saving machinery. This is costly to purchase and install, and so will reduce the wages fund.

In this case, either wages must fall or workers must be fired.
Some of these unemployed workers may be mopped up by the greater amount of accumulation that the extra profits will permit, but it might not be enough.
A pool of unemployed might remain, placing downward pressure and wages and leading to the general misery of the working classes.

Technical progress, for Ricardo, was not a many-splendored thing. On foreign trade, Ricardo set forth his famous theory of comparative advantage, Using his famous example of two nations (Portugal and England) and two commodities (wine and cloth), Ricardo argued that trade would be beneficial even if Portugal held an absolute cost advantage over England in both commodities.

Ricardo’s argument was that there are gains from trade if each nation specializes completely in the production of the good in which it has a “comparative” cost advantage in producing, and then trades with the other nation for the other good. Notice that the differences in initial position mean that the labor theory of value is not assumed to hold across countries – as it should be, Ricardo argued, because factors, particularly labor, are not mobile across borders.

As far as growth is concerned, foreign trade may promote further accumulation and growth if wage goods (not luxuries) are imported at a lower price than they cost domestically – thereby leading to a lowering of the real wage and a rise in profits. But the main effect, Ricardo noted, is that overall income levels would rise in both nations regardless.

With his 1817 treatise, Ricardo took economics to an unprecedented degree of theoretical sophistication.
He formalized the Classical system more clearly and consistently than anyone before had done.
For his efforts, he acquired a substantial following in Great Britain and elsewhere – what became known as the “Classical” or “Ricardian” School,

His system, however, was improved very little by his disciples. Perhaps only John Stuart Mill (1848) and Karl Marx (1867-94) added insights of any great weight. Ricardo’s theory gradually fell out of favor, and died a slow death soon after the Marginalist Revolution of 1871-74,

The High Price of Bullion, A Proof of the Depreciation of Bank Notes, 1810. Observations on some Passages in a Article in the Edinburgh Review, on the Depreciation of the Paper Currency, 1811. Reply to Mr. Bosanquet’s Practical Observation on the Report of the Bullion Committee, 1811. ( French ) An Essay on the Influence of a Low Price of Corn on the Profits of Stock showing the inexpediency of Restrictions on Importation; with remarks on Mr Malthus’ two last Publications ” 1815 – (2nd Copy), Proposals for an Economical and Secure Currency, with Observations on the profits of the Bank of England, as they regard the Public and the Proprietors of Bank Stock, 1816. ( French ) On the Principles of Political Economy and Taxation, 1817. (Copy (1) (2) ) Notes on Malthus’ Principles of Political Economy, 1820 (publ.1928). “Funding System”, 1820, Encyclopedia Britannica (Supp.) On Protection in Agriculture, 1822. ( French ) Mr Ricardo’s Speech on Mr Western’s Motion, for a Committee to consider the Effects produced by the Resumption of Cash payments, 1822. Plan for the Establishment of a National Bank, 1824. ( French ) The Works of David Ricardo, Esq., M.P. With a Notice of the Live and Writings of the Author, 1846, edited by J.R. McCulloch The Works and Correspondence of David Ricardo, 1951-1973, 11 volumes, edited by P. Sraffa and M.H. Dobb

Resources on David Ricardo

HET Pages: The Classical Ricardian System, the General Glut Controversy, Classical Growth, the Bullionist Controversy, Classical Theory of Money, “Ricardo in Parliament”, by Edwin Cannan 1894, EJ ” The Development of Ricardo’s Theory of Value ” by Jacob Hollander, 1904, QJE ” The Development of the Theory of Money From Adam Smith to David Ricardo ” by Jacob Hollander, 1910, QJE ” The Work and Influence of Ricardo ” by Jacob Hollander, 1911, AER ” Where Ricardo Succeeded and Where He Failed “, by James Bonar, 1911, AER ” The Ricardo Centenary: Discussion “, 1911, AER The British Economists by John Shield Nicholson, 1907. ” The Progress of Political Economy: Review of Ricardo and de Quincey “, 1848, Southern Quarterly Review “David Ricardo” by G. de Vivo from New Palgrave, 1987, at Univ. Marburge ( PDF Version ) ” On interpreting Ricardo : a reply to Sraffians ” by T Peach, 1998, Cambridge JE ” Ricardo, Torrens and Sraffa: the untenability of de Vivo’s ‘summing up’ ” by S Hollander, 1998, Cambridge JE ” Sraffa and the Interpretation of Ricardo: The Marxian Dimension ” by Samuel Hollander, 2000, HOPE ” A Single Theory or Two? Walras’s Critique of Ricardo ” by Heinz Kurz and Neri Salvadori ” The Ricardo-Malthus Debate on Underconsumption: A Case Study in Economic Conversation ” by Fiona Maclachlan, 1999, HOPE ” David Ricardo ” by Duncan Foley at the New School ” Ricardo ” by Professeur Friboulet at Genve Works of David Ricardo – Bibliography by Rod Hay (McMaster). Bibliography of works about David Ricardo David Ricardo at Britannica.com Essay on “Comparative Advantage” Blake LeBaron’s essay on Comparative Advantage ” Ricardo’s Problem of an Invariable Measure of Value ” by F.C. Maclachlan Ricardo Page at McMaster Ricardo Page at Akamac Ricardo Page at Univ. Marburg Ricardo Page at Laura Forgette Ricardo Page at Victorian Web David Ricardo Page at the World Trade Organization (WTO) Ricardo Page (in Spanish) Ricardo Bio from la Nation, Costa Rica (in Spanish) Brief Ricardo bio by Roger McCain Ricardo Page by Stephen Martin

What is the basis of the Ricardo’s rent theory?

According to Ricardo rent arises as the difference between production of Marginal land (On which zero rent accrues) and superior land. As there is general tendency to move from most fertile land (Attracts highest rent) to the less fertile land, a point comes where no rent accrues to what is called a Marginal land.

What is theory of wages in economics?

Home Politics, Law & Government Banking & Business wage theory, portion of economic theory that attempts to explain the determination of the payment of labour. A brief treatment of wage theory follows. For full treatment, see wage and salary, The subsistence theory of wages, advanced by David Ricardo and other classical economists, was based on the population theory of Thomas Malthus,

It held that the market price of labour would always tend toward the minimum required for subsistence.
If the supply of labour increased, wages would fall, eventually causing a decrease in the labour supply.
If the wage rose above the subsistence level, population would increase until the larger labour force would again force wages down.

The wage-fund theory held that wages depended on the relative amounts of capital available for the payment of workers and the size of the labour force. Wages increase only with an increase in capital or a decrease in the number of workers. Although the size of the wage fund could change over time, at any given moment it was fixed.

Thus, legislation to raise wages would be unsuccessful, since there was only a fixed fund to draw on.
Arl Marx, an advocate of the labour theory of value, believed that wages were held at the subsistence level by the existence of a large number of unemployed.
The residual-claimant theory of wages, originated by the American economist Francis A.

Walker, held that wages were the remainder of total industrial revenue after rent, interest, and profit (which were independently determined) were deducted. Get a Britannica Premium subscription and gain access to exclusive content. Subscribe Now In the bargaining theory of wages, there is no single economic principle or force governing wages.

Instead, wages and other working conditions are determined by workers, employers, and unions, who determine these conditions by negotiation.
The marginal productivity theory of wages, formulated in the late 19th century, holds that employers will hire workers of a particular type until the addition to total output made by the last, or marginal, worker to be hired equals the cost of hiring one more worker.

The wage rate will equal the value of the marginal product of the last-hired worker. Supporters of this theory maintain that the test of an economic theory should be its predictive power. They hold that the marginal-productivity theory is a guide to long-run trends in wage determination and applies more generally than the bargaining theory of wages.

What is the name of the theory that explains the fact that the wage of workers with technical graduate degree has increased significantly since 1980s?

This hypothesis—that a burst of new technology caused a rise in the demand for highly skilled workers, which in turn led to a rise in earnings inequality—has become known as the Skill-Biased Technical Change (SBTC) hypothesis.

Is the Iron Law of Wages a feature of capitalism?

Iron law of wages From Mises Wiki, the global repository of classical-liberal thought Iron Law of Wages is the doctrine according to which “the price of, labor is equal to its cost of production,” that is “the means of subsistence that he requires for his maintenance, and for the propagation of his race.” The Iron Law of Wages is an extension to the field of of the idea that the of anything is found in its cost of production or reproduction.

This alleged law holds that under capitalism, there is a natural law of wages toward which wage rates must constantly tend to return.
This “natural” rate is that which provides a “subsistence level” for workers, wives and the raising to maturity of sufficient children to maintain the number of workers needed for the state of production.

It is held that higher wages will result in raising more children to maturity, and lower wages in fewer, so that eventually the competition of more, or fewer, workers must drive wages back in line with the natural rate needed to sustain a sufficient number of workers.

What is the iron theory?

iron law of oligarchy, sociological thesis according to which all organizations, including those committed to democratic ideals and practices, will inevitably succumb to rule by an elite few (an oligarchy ). The iron law of oligarchy contends that organizational democracy is an oxymoron,

Although elite control makes internal democracy unsustainable, it is also said to shape the long-term development of all organizations—including the rhetorically most radical—in a conservative direction. Robert Michels spelled out the iron law of oligarchy in the first decade of the 20th century in Political Parties, a brilliant comparative study of European socialist parties that drew extensively on his own experiences in the German Socialist Party.

Influenced by Max Weber ‘s analysis of bureaucracy as well as by Vilfredo Pareto ‘s and Gaetano Mosca ‘s theories of elite rule, Michels argued that organizational oligarchy resulted, most fundamentally, from the imperatives of modern organization: competent leadership, centralized authority, and the division of tasks within a professional bureaucracy,

These organizational imperatives necessarily gave rise to a caste of leaders whose superior knowledge, skills, and status, when combined with their hierarchical control of key organizational resources such as internal communication and training, would allow them to dominate the broader membership and to domesticate dissenting groups.

Michels supplemented this institutional analysis of internal power consolidation with psychological arguments drawn from Gustave Le Bon ‘s crowd theory. From this perspective, Michels particularly emphasized the idea that elite domination also flowed from the way rank-and-file members craved guidance by and worshipped their leaders.

Michels insisted that the chasm separating elite leaders from rank-and-file members would also steer organizations toward strategic moderation, as key organizational decisions would ultimately be taken more in accordance with leaders’ self-serving priorities of organizational survival and stability than with members’ preferences and demands.

The iron law became a central theme in the study of organized labour, political parties, and pluralist democracy in the postwar era. Although much of this scholarship basically confirmed Michels’s arguments, a number of prominent works began to identify important anomalies and limitations to the iron law framework.

Seymour Lipset, Martin Trow, and James Coleman ‘s analysis of the International Typographical Union (ITU), for example, showed that sustained union democracy was possible given printers’ relative equality of income and status, mastery of communication skills, and generalized political competence, which underpinned the ITU’s unusual history of enduring two-party competition (Independents and Progressives), which mirrored the American two-party system,

In the party literature, Samuel Eldersveld argued that the power of organizational elites in Detroit was not nearly as concentrated as the iron law would suggest. He found party power relatively dispersed among different sectors and levels, in a “stratarchy” of shifting coalitions among component groups representing different social strata.

Subsequent studies of parties and unions, and of other organizations such as voluntary associations and social movements, further qualified the iron law. These studies examined a broad range of factors—such as factional competition, purposive activism, interorganizational ties, and external opportunities and constraints—that highlighted both the contingent nature of organizational power and Michels’s relative neglect of environmental context,

After the turn of the 21st century, although work on the changing role of social institutions frequently revisited organizational dynamics and dilemmas examined by Michels, it generally did so from a more global perspective. Along these lines, scholars began to explore the strategic and internal-democratic implications of transnational resource flows, of state-sanctioned decentralized policy networks, of cross-border political identities, and of the Internet as an internal communication tool.

The iron law of oligarchy therefore remains a salient axis in the analysis of the internal politics of differentiated polities’ societal associations, transnational advocacy networks, and multinational corporations, as well as of the broader nature of democratic politics in the globalizing Information Age.

Jeff Sluyter-Beltrão

What is the iron law responsibility?

The Law of Long-Run Self-Interest, or the Iron Law of Responsibility:

The Law of Long-Run Self-Interest, or the Iron Law of Responsibility: “In the long run, those who do not use power in a manner that society considers responsible will tend to lose it.” Source: Davis and Blomstrom (1971). The Principle of Public Responsibility The firm is said to have three levels of involvement: Primary involvement : Doing the firm’s basic tasks or missions. Secondary involvement : Fixing the unintended byproducts of the primary level, such as cleaning up pollution. Tertiary involvement : Everything else, such as making speeches at business school graduations or acting as a public expert on the economy.

The originators of this principle, Preston and Post, claim that managers should stop after the secondary level. In other words, as a rule of thumb, firms and their managers should not be engaged in activities beyond their formal tasks and the impacts of those tasks. Source: Preston and Post (1975) : The Law of Long-Run Self-Interest, or the Iron Law of Responsibility:

Who created the iron law of responsibility?

What CSR is What we are experiencing now is the culture of innovation which is changing our minds and our social and economic paradigms. Companies are required to change their organization models and redefine their operative strategies. CSR introduces (or should do so) a new ethical mechanism of doing management.

But this is not only a company affair. This process, this new way of thinking involves all business stakeholders, even the customers with their purchasing choices (YES, we got the power!). A CSR perspective recognizes the main role of human, social, environmental dimensions, which, in the end, becomes finally a priority in business affairs.

The respect of rules, not only legal laws, but also the unwritten ones, as the trust relationship, become management indicators in dealing with business as a sort of self-regulation. But let’s see how CSR has evolved The concept of CSR was born in USA in the 1920’s when the labor unions, churches and the leaders of the moral majority began to apply democratic forms of pressure to which the manufacturers and businessmen were called on to provide proactive responses such as becoming aware of living conditions, safety in the workplace and then to develop an early form of corporate welfare.

Later on in the 1930’s there was a change in the way companies were seen by people. Managers were acting on behalf of the whole community wellbeing and companies were involved in social responsibility. After the Great Depression the American businessmen became as “hero of innovation and success”. Companies became part of the system and they were no longer represented as an entity in their own right.

They started to feel the need to seek recognition on both technical (such as performance standards) as well as in moral level. In 1960’s the theorist Davis with his “Iron law of responsibility” combines the concept of power to that of social responsibility.

According to Davis “SR of businessmen needs to be commensurate with their social power” The rejection of SR leads to an erosion of power. With Davis we see how economic affairs and SR blend together. We see the birth of CSR, therefore the company contributes to promote human values such as cooperation, motivation, honesty and self-development at work.

In a certain way the author is calling for companies to fulfill human dignity and creativity. McGuire developed the idea of “corporate citizenship”, which means that companies must act justly as a proper citizen should. Walton introduces the concept of “volunteerism”, i.e.

A company should be voluntarily willing to act in a responsible way on behalf of the community regardless of the economic return.
What happens next The debate intensifies and the first critics to CRS are born.
Questions like that starts being asked: “Should companies conform to social requirement or should they be innovative?” “How much should a company be involved in social questions before it is considered a socially oriented company?” “How is it possible to measure and define the standards of a CSR?” Davis claimed simply that the SR starts where the law stops.

In 1970’s and 1980’s the CSR developed even more becoming part of the organizational processes and influencing the corporate decision making in doing business. Finally the CSR develops a communication’s strategy, a kind of corporate accountability, CSR starts to have two goals.

On the one hand it is considered a corporate defender improving the company image, while on the other hand it encourages positive behavior. How CSR has changed our society The economic behavior includes the social, cultural, ethical and environmental sphere. We start talking about “participative democracy”, a new way of liberal democracy in which society is seen as an aggregation of powerful groups who have the ability of putting pressure on the system.

In that system everyone of us has the power to influence the system and for that reason it is important to be informed and to have the correct information. Whoever is involved in an economic activity has to take into consideration how their activity affects the environment through the exploitation of natural resources or pollution and how it is influencing society and culture (for example with the development of workers rights).

What governments are doing CSR takes a central role also in European politics.
They are involved in the development of a strategic plan defined by the Lisbon European Council whose goal it is to make Europe an economy based on knowledge.
The European commission, in order to promote a new way of thinking of the question has also developed the guidelines to improve companies’ awareness.

The commitment for a sustainable development becomes an opportunity even economically such as increasing the investments in technology and improving the sustainable economy. Also CSR is an opportunity for social progress. If a company presents itself as a competitive one from a social point of view whole the market has to adapt to these new standards according to the principals of market self-regulation.

How companies can improve their SR They can act on two different levels, through a first environmental sustainability improving their supply chain procedures, reducing the environmental impacts, working on a sustainable production and reducing the waste.
Also through a social development and improvement of working condition, such as improving the diversity management, valorizing gender equality, through smart working politics, stimulating the cooperation and the participation of the employees, improving the workplace climate (which means a lower rate of absenteeism), improving the motivation and doing talent attraction and talent retention.

What does it mean? It means that when You Company take the time to effectively measure the social impact of an hypothetic strategy, You will be more willing to manage considering the social ramification of your business model and then you will make smarter and effective investments.

What does iron mean example?

Iron noun (METAL) a chemical element that is a common greyish-coloured metal. It is strong, used in making steel, and exists in very small amounts in blood: Iron rusts easily. Liver is a particularly rich source of dietary iron. iron ore.

Who introduced the concept of wages?

The Theory of Wages is a book by the British economist John R. Hicks published in 1932 (2nd ed., 1963). It has been described as a classic microeconomic statement of wage determination in competitive markets. It anticipates a number of developments in distribution and growth theory and remains a standard work in labour economics,

Part I of the book takes as its starting point a reformulation of the marginal productivity theory of wages as determined by supply and demand in full competitive equilibrium of a free market economy. Part II considers regulated labour markets resulting from labour disputes, trade unions and government action.

The 2nd edition (1963) includes a harsh critical review and, from Hicks, two subsequent related articles and an extensive commentary. The book presents:

labour demand as derived from the demand for output, such that for example a fall in the wage rate would lead to substitution away from other inputs and more labour use from increased production that the lower wage would facilitate
the first statement of the economic concept of elasticity of substitution, a measure of the substitution effect posited above as to how much one factor of production (say labour) would change to keep output constant in response to a change in relative factor prices
the relation of this concept and its determinants to the distribution of factor-income shares
technical change as biased or neutral (later termed Hicks-neutral technical change ), depending on how it affects the marginal product of one productive factor (say labour) relative to that of another (say capital )
a macroeconomic hypothesis about induced innovation that ” change in the relative prices of the factors of production is itself a spur to invention, and to invention of a particular kind—directed to economising the use of a factor which has become relatively expensive,” including from one factor (say capital) growing at a faster rate than another (say labour) (p.124)
elements of employee-employer attachments in distinguishing regular and casual labour with an emphasis on expectations, imperfect information and uncertainty in the labour market
the first-ever attempt to model a labour dispute that might end in a strike,

When originally created what was the purpose of the minimum wage?

Overview – The national minimum wage was created by Congress under the Fair Labor Standards Act (FLSA) in 1938. Congress enacted this legislation under its authority in Article I, Section 8 of the U.S. Constitution : “The Congress shall have power to,

Regulate commerce,
Among the several states.” FLSA was a comprehensive federal scheme which provided for minimum wages, overtime pay, record keeping requirements, and child labor regulations.
The purpose of the minimum wage was to stabilize the post-depression economy and protect the workers in the labor force.

The minimum wage was designed to create a minimum standard of living to protect the health and well-being of employees. Others have argued that the primary purpose was to aid the lowest paid of the nation’s working population, those who lacked sufficient bargaining power to secure for themselves a minimum subsistence wage.

When was wages created?

References –

^ Jump up to: a b c d e f “State Minimum Wage Laws”, Wage and Hour Division (WHD), United States Department of Labor, Click on states on that map to see exact minimum wage info by state. See bottom of page for District of Columbia and U.S. territories, See: table and abbreviations list,
^ Jump up to: a b “Wage Rate in American Samoa” (PDF), Wage and Hour Division (WHD), United States Department of Labor.
^ Bradley, David H. (February 3, 2016). State Minimum Wages: An Overview (PDF), Washington, D.C.: Congressional Research Service, Retrieved January 31, 2018,
^ “Fair Labor Standards Act of 1938: Maximum Struggle for a Minimum Wage | U.S. Department of Labor”, www.dol.gov, Retrieved January 19, 2021,
^ Jump up to: a b 1634–1699: McCusker, J.J. (1997). How Much Is That in Real Money? A Historical Price Index for Use as a Deflator of Money Values in the Economy of the United States: Addenda et Corrigenda (PDF), American Antiquarian Society,1700–1799: McCusker, J.J. (1992). How Much Is That in Real Money? A Historical Price Index for Use as a Deflator of Money Values in the Economy of the United States (PDF), American Antiquarian Society,1800–present: Federal Reserve Bank of Minneapolis. “Consumer Price Index (estimate) 1800–”, Retrieved April 16, 2022,
^ Jump up to: a b c d “Minimum Wage”, Wage and Hour Division (WHD), United States Department of Labor, Retrieved December 14, 2017,
^ Wenger, Jeffrey B. (September 2016). “Working for $7.25 an Hour: Exploring the Minimum Wage Debate”, Rand, Retrieved December 14, 2017, By 1968, the minimum wage had reached its peak purchasing power of $1.60 per hour ($11.08 in 2016 dollars).
^ “Minimum Wage”, United States Department of Labor, Retrieved November 20, 2017,
^ Jump up to: a b c Vanek-Smith, Stacey; Garcia, Cardiff (May 16, 2019). “The Real Minimum Wage”, NPR, Retrieved January 9, 2020,
^ Jump up to: a b “State Minimum Wages, 2020 Minimum Wage by State”, National Conference of State Legislatures, Retrieved March 12, 2020,
^ Jump up to: a b c “The Budgetary Effects of the Raise the Wage Act of 2021” (PDF), Congressional Budget Office, February 1, 2021. Archived (PDF) from the original on February 8, 2021, Retrieved February 9, 2021, The cumulative budget deficit over the 2021–2031 period would increase by $54 billion. Increases in annual deficits would be smaller before 2025, as the minimum-wage increases were being phased in, than in later years. Higher prices for goods and services—stemming from the higher wages of workers paid at or near the minimum wage, such as those providing long-term health care—would contribute to increases in federal spending.
^ Jump up to: a b Selyukh, Alina (February 8, 2021). “$15 Minimum Wage Would Reduce Poverty But Cost Jobs, CBO Says”, NPR, Raising the federal minimum wage to $15 an hour by 2025 would increase wages for at least 17 million people, but also put 1.4 million Americans out of work, according to a study by the Congressional Budget Office released on Monday. A phase-in of a $15 minimum wage would also lift some 900,000 out of poverty, according to the nonpartisan CBO. This higher federal minimum could raise wages for an additional 10 million workers who would otherwise make sightly above that wage rate, the study found.
^ Morath, Eric; Duehren, Andrew (February 8, 2021). “$15 Minimum Wage Would Cut Employment, Reduce Poverty, CBO Study Finds – Nonpartisan study says raising minimum wage would cost 1.4 million jobs but lift 900,000 people above the poverty line”, Wall Street Journal, While many Americans would see raises, the analysis showed a minimum-wage increase would cause prices to rise, the federal budget deficit to widen and overall economic output to slightly decrease over the next decade. Higher wages would increase the cost of producing goods and services, and businesses would pass some of those increased costs on to consumers in the form of higher prices, resulting in reduced demand, the CBO said. “Employers would consequently produce fewer goods and services, and as a result, they would tend to reduce their employment of workers at all wage levels,” the report said. “Young, less educated people would account for a disproportionate share of those reductions in employment.”
^ See the section on Employment for more detailed findings from this study, including employment estimates on raising the wage to $10 or $12 per hour.
^ “America’s Hidden Common Ground on Economic Opportunity and Inequality – Public Agenda”, Public Agenda. September 24, 2020, Retrieved January 25, 2021,
^ BranchNJ07764732.571.3400, Monmouth University 400 Cedar AvenueWest Long. “Public Wants Stimulus Checks More Than GOP Support for Plan”, Monmouth University Polling Institute, Retrieved March 6, 2021,
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^ “Hawaii Governor Signs $18 Minimum Wage Law, First of Its Kind”, News.bloomberglaw.com, Retrieved August 7, 2022,
^ Tritch, Teresa (March 7, 2014). “F.D.R. Makes the Case for the Minimum Wage”, New York Times, Retrieved March 7, 2014,
^ “Franklin Roosevelt’s Statement on the National Industrial Recovery Act”, Franklin D. Roosevelt Presidential Library and Museum Our Documents, June 16, 1933, Retrieved March 17, 2018,
^ Broda, Rudolf; United States. Bureau of Labor Statistics (December 1928). Minimum Wage Legislation in Various Countries: Bulletin of the United States Bureau of Labor Statistics, No.467, Bulletin of the United States Bureau of Labor Statistics.G.P.O.p.8.
^ Willis J., Nordlund (1997). The Quest for a Living Wage: The History of the Federal Minimum Wage Program, Westport, Conn.: Greenwood Press.p.2. ISBN 978-0-313-26412-2, OCLC 33983425,
^ Hammond, Matthew B. (1913). “The Minimum Wage in Great Britain and Australia”, The Annals of the American Academy of Political and Social Science,48 : 26. doi : 10.1177/000271621304800103, JSTOR 1012009, S2CID 153688147,
^ Vivien., Hart (2001). Bound by Our Constitution : Women, Workers, and the Minimum Wage, Princeton: Princeton University Press.p.67. ISBN 978-1-4008-2156-3, OCLC 700688619,
^ Webb, Sidney (1912). “The Economic Theory of a Legal Minimum Wage”, Journal of Political Economy,20 (10): 973–998. doi : 10.1086/252125, hdl : 2027/uiuo.ark:/13960/t64521b8x, JSTOR 1820545, S2CID 154687152,
^ Starr, Gerald (1993). Minimum Wage Fixing: An International Review of Practices and Problems (2nd impression (with corrections) ed.). Geneva: International Labour Office.p.1. ISBN 9789221025115,
^ Hammond, Matthew B. (1913). “The Minimum Wage in Great Britain and Australia”, The Annals of the American Academy of Political and Social Science,48 : 27. doi : 10.1177/000271621304800103, JSTOR 1012009, S2CID 153688147,
^ Broda, Rudolf; United States. Bureau of Labor Statistics (December 1928). Minimum Wage Legislation in Various Countries: Bulletin of the United States Bureau of Labor Statistics, No.467, Bulletin of the United States Bureau of Labor Statistics.G.P.O.p.11.
^ Jump up to: a b c Fishback, Price V.; Seltzer, Andrew J. (2021). “The Rise of American Minimum Wages, 1912–1968”, Journal of Economic Perspectives,35 (1): 73–96. doi : 10.1257/jep.35.1.73, ISSN 0895-3309,
^ Jerold L., Waltman (2000). The Politics of the Minimum Wage, Urbana: University of Illinois Press.p.11. ISBN 978-0-252-02545-7, OCLC 42072067,
^ Vivien, Hart (2001). Bound by Our Constitution: Women, Workers, and the Minimum Wage, Princeton: Princeton University Press.p.63. ISBN 978-1-4008-2156-3, OCLC 700688619,
^ Vivien, Hart (2001). Bound by Our Constitution : Women, Workers, and the Minimum Wage, Princeton: Princeton University Press.p.68. ISBN 978-1-4008-2156-3, OCLC 700688619,
^ Kelley, Florence (1912). “Minimum-Wage Laws”, Journal of Political Economy,20 (10): 999–1010. doi : 10.1086/252126, JSTOR 1820546,
^ “Archived copy” (PDF), Archived from the original (PDF) on February 16, 2018, Retrieved February 16, 2018, } : CS1 maint: archived copy as title ( link )
^ Vivien, Hart (2001). Bound by Our Constitution : Women, Workers, and the Minimum Wage, Princeton: Princeton University Press. pp.70–71. ISBN 978-1-4008-2156-3, OCLC 700688619,
^ Jump up to: a b William P. Quigley, “‘A Fair Day’s Pay For A Fair Day’s Work’: Time to Raise and Index the Minimum Wage”, 27 St. Mary’s L.J.513, 516 (1996)
^ Jump up to: a b Skocpol, Theda (1992). “Chapter 7: Safeguarding the “Mothers of the Race”: Protective Legislation for Women Workers”. Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States, Belknap Press of Harvard University Press. ISBN 978-0-674-71765-7,
^ Theda, Skocpol (1992). Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States, Cambridge, Mass.: Belknap Press of Harvard University Press.p.423. ISBN 0-674-71765-1, OCLC 25409018,
^ Thomas C. Leonard, Illiberal Reformers: Race, Eugenics & American Economics in the Progressive Era, (Princeton: Princeton University Press, 2016): 158-167.
^ Levin-Waldman, Oren M. (December 1, 2015). The Minimum Wage: A Reference Handbook, ABC-CLIO. pp.12–13. ISBN 978-1-4408-3395-3,
^ Waltman, Jerold L. (2004). The Case for the Living Wage, Algora Publishing. pp.184, ISBN 978-0-87586-302-3,
^ Text of U.S.v. Darby Lumber Co., 312 U.S.100 (1941) is available from: Findlaw Justia
^ Jump up to: a b “Minimum Wage”, Wage and Hour Division (WHD), United States Department of Labor, Retrieved April 16, 2017,
^ “Fact Sheet #32: Youth Minimum Wage – Fair Labor Standards Act” (PDF), Wage and Hour Division (WHD), United States Department of Labor, Retrieved September 25, 2013,
^ “City Governments Are Raising Standards for Working People—and State Legislators Are Lowering Them Back Down”, Economic Policy Institute, Retrieved March 25, 2018,
^ “Worker Rights Preemption in the US: A Map of the Campaign to Suppress Worker Rights in the States”, Economic Policy Institute, Retrieved March 25, 2018,
^ Enforcement, Division of Labor Standards. “Minimum Wage”, Dir.ca.gov, Retrieved October 18, 2017,
^ “Illinois Hourly Minimum Wage Rates by Year – Fair Labor Standards Division”, www2.illinois.gov, Retrieved March 24, 2019,
^ “Minimum Wage”, Colorado Department of Labor and Employment. May 12, 2014. Archived from the original on July 15, 2017, Retrieved October 18, 2017,
^ “Governor Cuomo Signs $15 Minimum Wage Plan and 12 Week Paid Family Leave Policy into Law”, Governor.ny.gov, April 4, 2016, Retrieved October 18, 2017,
^ Jump up to: a b “City Minimum Wage Laws: Recent Trends and Economic Evidence” (PDF), www.nelp.org, National Employment Law Project. April 2016, Retrieved April 13, 2019,
^ Dube, Arindrajit; Lindner, Attila (2021). “City Limits: What Do Local-Area Minimum Wages Do?”, Journal of Economic Perspectives,35 (1): 27–50. doi : 10.1257/jep.35.1.27, ISSN 0895-3309,
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^ “Seattle City Takes Lead to Raise Minimum Wage to $15 Per Hour”, Seattle News.Net. Archived from the original on June 7, 2014, Retrieved June 5, 2014,
^ Johnson, Kirk (November 26, 2013). “Voters in SeaTac, Wash., Back $15 Minimum Wage”, The New York Times, ISSN 0362-4331, Retrieved March 31, 2018,
^ Fox, Emily Jane. “Washington City Votes to Raise Minimum Wage to $15”, CNNMoney, Retrieved March 31, 2018,
^ “Minimum Wage Ordinance (MWO) – Office of Labor Standards Enforcement”, Sfgsa.org, Retrieved July 2, 2018,
^ Legislatures, National Conference of State. “State Minimum Wages | 2017 Minimum Wage by State”, Ncsl.org, Retrieved October 1, 2017,
^ Davis, Aaron C. (June 21, 2016). “D.C. Gives Final Approval to $15 Minimum Wage”, Washingtonpost.com, Retrieved October 18, 2017,
^ “Los Angeles City Council Approves Landmark Minimum Wage Increase”, Los Angeles Times, June 3, 2015, Retrieved August 14, 2015,
^ Malagón, Elvia (June 26, 2020). “Chicago’s Minimum Wage Rising Wednesday to $14 Amid Pandemic. For Some, It Won’t Be Enough”, Chicago Sun-Times, Retrieved January 1, 2021,
^ “Minimum Wage”, Minimumwage.minneapolismn.gov, Retrieved March 27, 2018,
^ “Minimum Wage Tracker”, Economic Policy Institute, Retrieved March 17, 2018,
^ Castillo-Freeman, Alida; Freeman, Richard B. (January 1992). “When the Minimum Wage Really Bites: The Effect of the U.S.-Level Minimum on Puerto Rico” (PDF), Immigration and the Workforce: Economic Consequences for the United States and Source Areas, Archived from the original (PDF) on June 7, 2016.
^ Lane, C. (July 8, 2015). “Puerto Rico’s Crisis Illustrates the Risks of Minimum Wage Hikes”, The Washington Post, Archived from the original on March 18, 2016.
^ Worstall, Tim (July 3, 2015). “Memo to the Fight for $15: Puerto Rico Happens with a Too High Minimum Wage”, Forbes.com, Archived from the original on November 7, 2017.
^ Krueger, A.; Teja, R.; Wolfe, A. (June 29, 2015). “Puerto Rico – A Way Forward” (PDF), Government Development Bank for Puerto Rico, Archived from the original (PDF) on April 5, 2016.
^ “Puerto Rico Minimum Wage Act” (PDF), Sistema Único de Trámite Legislativo, Oficina de Servicios Legislativos, Retrieved May 10, 2022,
^ Jump up to: a b “Indexing the Minimum Wage for Inflation”, Economic Policy Institute, Retrieved March 20, 2018,
^ “San Francisco Historical Minimum Wage Rates | Office of Labor Standards Enforcement”, sfgov.org, Retrieved March 19, 2018,
^ “Minimum Wage Tracker”, Economic Policy Institute, Retrieved March 19, 2018,
^ “ACORN and Unions Increase Working Wages Across the Country”, Common Dreams. November 11, 2006. Archived from the original on June 18, 2013.
^ Gould, Elise. “Low-wage Workers Saw the Biggest Wage Growth in States that Increased Their Minimum Wage Between 2018 and 2019”, www.epi.org/, Retrieved March 12, 2020,
^ “Inflation Triggers Mandatory Minimum Wage Increases in California”, May 13, 2022.
^ Peter, Jamison (April 9, 2016). “Outrage After Big Labor Crafts Law Paying Their Members Less Than Non-union Workers”, Los Angeles Times, Retrieved April 11, 2016, At the Sheraton Universal Hotel, a longtime union property, bellhops, waiters and banquet servers make California’s current minimum wage: $10 an hour. (When the hotel ordinance first went into effect, the state minimum was $9.) Those doing the same jobs at a non-union Hilton less than 500 feet away make at least $15.37 under the city’s hotel wage law. Neither amount includes tips.
^ Jump up to: a b Minimum wage loophole written to help labor unions, Washington Examiner, December 24, 2014
^ Higgins, Sean. “Minimum Wage Loophole Written to Help Labor Unions”, Washington Examiner, Retrieved May 21, 2017,
^ Jump up to: a b c FRED Graph, Using U.S. Department of Labor data. Federal Minimum Hourly Wage for Nonfarm Workers for the United States, Inflation adjusted (by FRED ) via the Consumer Price Index for All Urban Consumers: All Items in U.S. City Average (CPIAUCSL), Run cursor over graph to see nominal and real minimum wages pop up for specific months.
^ “History of Federal Minimum Wage Rates Under the Fair Labor Standards Act, 1938–2009”, US Department of Labor, United States Department of Labor.
^ “Changes in Basic Minimum Wages in Non-Farm Employment Under State Law: Selected Years 1968 to 2021”,U.S. Department of Labor, January 2022. } : CS1 maint: url-status ( link )
^ Jump up to: a b “CPI Inflation Calculator”,U.S. Bureau of Labor Statistics, Retrieved August 21, 2017,
^ Jump up to: a b Abrams, Rachel (December 31, 2014). “States’ Minimum Wages Rise, Helping Millions of Workers”, NYT, Retrieved January 1, 2015,
^ “Federal Reserve Bank of St. Louis, Series STTMINWGFG”, January 1968, Retrieved November 20, 2018,
^ “Federal Reserve Bank of St. Louis, Series CPALTT01”, January 1955, Retrieved November 20, 2018,
^ What Every Economics Student Needs to Know and Doesn’t Get in the Usual Principles Text, Routledge.2014.p.153.
^ “The U.S. Economy Is Suffering from Low Demand. Higher Wages Would Help”, Harvard Business Review, February 21, 2018, Retrieved February 26, 2018,
^ Hsu, Chang Samuel; Robinson, Paul R. (December 20, 2017). Springer Handbook of Petroleum Technology, Springer.p.552. ISBN 978-3-319-49347-3,
^ For a review article that analyzes the classical, Keynesian, and underconsumptionist approaches to wages, see Weintraub, Sidney (December 1956). “A Macroeconomic Approach to the Theory of Wages”. The American Economic Review,46 (5): 835–56. JSTOR 1811907,
^ Nicholson, Walter; Snyder, Christopher (2012). Microeconomic Theory: Basic Principles and Extensions (11 ed.). Mason, OH: South-Western. pp.27, 154. ISBN 978-1-111-52553-8,
^ Hazlitt, Henry (1979). Economics in One Lesson, Three Rivers Press. ISBN 0-517-54823-2,
^ Jump up to: a b c Konczal, Mike; Covert, Bryce (October 8, 2014). “The Score: Does the Minimum Wage Kill Jobs?”, The Nation, ISSN 0027-8378, Retrieved December 12, 2017,
^ “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania” (PDF), Davidcard.berkeley.edu, Retrieved October 18, 2017,
^ Jump up to: a b 12 Mar.2021 “A $15 Minimum Wage Would Lift Millions out of Poverty with ‘Limited Negative Effects’ on Aggregate Income, Morgan Stanley Says”
^ Neumark, David; Wascher, William (2000). “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment”. American Economic Review,90 (5): 1362–1396. doi : 10.1257/aer.90.5.1362,
^ Jump up to: a b Neumark, Wascher (2007). Minimum Wages and Employment. Foundations and Trends in Microeconomics,
^ Stanley, T.D. (2005). “Beyond Publication Bias”. Journal of Economic Surveys,19 (3): 309. doi : 10.1111/j.0950-0804.2005.00250.x, S2CID 153607754,
^ Doucouliagos, Hristos; Stanley, T.D. (2009). “Publication Selection Bias in Minimum-Wage Research? A Meta-Regression Analysis”. British Journal of Industrial Relations,47 (2): 406–28. doi : 10.1111/j.1467-8543.2009.00723.x, S2CID 153464294,
^ Schmitt, John (February 2013). “Why Does the Minimum Wage Have No Discernible Effect on Employment?” (PDF), Center for Economic and Policy Research, Retrieved December 5, 2013,
- Brad Plumer (February 14, 2013). “Economists disagree on whether the minimum wage kills jobs. Why?”, The Washington Post,
^ Sabia, Burkhauser, Hansen (2012). Are the Effects of Minimum Wage Increases Always Small? New Evidence From a Case Study of New York State, Industrial and Labor Relations Review,
^ Burkhauser, Couch, Wittenburg (2000). Who Minimum Wage Increases Bite: An Analysis Using Monthly Data from the SIPP and the CPS. South Economic Journal
^ “The Logical Floor”, The Economist, December 14, 2013.
^ Stilwell, Victoria (March 8, 2014). “Highest Minimum-Wage State Washington Beats U.S. in Job Creation”, Bloomberg,
^ Jardim, Ekaterina; Long, Mark C.; Plotnick, Robert (May 2018). “Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle” (PDF), National Bureau of Economic Research, doi : 10.3386/w23532, S2CID 22245787, Retrieved May 4, 2020, This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to as much as $11 in 2015 and to as much as $13 in 2016. Using a variety of methods to analyze employment in all sectors paying below a specified real hourly wage rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by 6-7 percent, while hourly wages in such jobs increased by 3 percent. Consequently, total payroll for such jobs decreased, implying that the Ordinance lowered the amount paid to workers in low-wage jobs by an average of $74 per month per job in 2016.
^ Ehrenfreund, Max (July 29, 2016). “Why raising the minimum wage in Seattle did little to help workers, according to a new study”, The Washington Post, Archived from the original on September 17, 2016. The average hourly wage for workers affected by the increase jumped from $9.96 to $11.14, but wages likely would have increased some anyway due to Seattle’s overall economy. Meanwhile, although workers were earning more, fewer of them had a job than would have without an increase. Those who did work had fewer hours than they would have without the wage hike.
^ Jardim, Ekaterina; Long, Mark C.; Plotnick, Robert (October 2018). “Minimum Wage Increases And Individual Employment Trajectories” (PDF), National Bureau of Economic Research, doi : 10.3386/w25182, S2CID 158881066, Retrieved May 5, 2020, Using administrative employment data from the state of Washington, we use short-duration longitudinal panels to study the impact of Seattle’s minimum wage ordinance on individuals employed in low-wage jobs immediately before a wage increase. We draw counterfactual observations using nearest-neighbor matching and derive effect estimates by comparing the “treated” cohort to a placebo cohort drawn from earlier data. We attribute significant hourly wage increases and hours reductions to the policy. On net, the minimum wage increase from $9.47 to as much as $13 per hour raised earnings by an average of $8-$12 per week. The entirety of these gains accrued to workers with above-median experience at baseline; less-experienced workers saw no significant change to weekly pay. Approximately one-quarter of the earnings gains can be attributed to experienced workers making up for lost hours in Seattle with work outside the city limits. We associate the minimum wage ordinance with an 8% reduction in job turnover rates as well as a significant reduction in the rate of new entries into the workforce.
^ Zeitlin, Matthew (July 22, 2019). “Laboratories of Democracy: What Seattle Learned from Having the Highest Minimum Wage in the Nation”, Vox, Vox Media, Retrieved May 5, 2020,
^ Cengiz, Doruk; Dube, Arindrajit; Lindner, Attila; Zipperer, Ben (2019). “The Effect of Minimum Wages on Low-Wage Jobs: Evidence from the United States Using a Bunching Estimator”, The Quarterly Journal of Economics, doi : 10.3386/w25434, S2CID 158942640,
^ Derenoncourt, Ellora; Montialoux, Claire (December 22, 2020). “Minimum Wages and Racial Inequality”, The Quarterly Journal of Economics,136 (1): 169–228. doi : 10.1093/qje/qjaa031, ISSN 0033-5533, The earnings difference between white and black workers fell dramatically in the United States in the late 1960s and early 1970s. This article shows that the expansion of the minimum wage played a critical role in this decline. The 1966 Fair Labor Standards Act extended federal minimum wage coverage to agriculture, restaurants, nursing homes, and other services that were previously uncovered and where nearly a third of black workers were employed. We digitize over 1,000 hourly wage distributions from Bureau of Labor Statistics industry wage reports and use CPS microdata to investigate the effects of this reform on wages, employment, and racial inequality. Using a cross-industry difference-in-differences design, we show that earnings rose sharply for workers in the newly covered industries. The impact was nearly twice as large for black workers as for white workers. Within treated industries, the racial gap adjusted for observables fell from 25 log points prereform to 0 afterward. We can rule out significant disemployment effects for black workers. Using a bunching design, we find no aggregate effect of the reform on employment. The 1967 extension of the minimum wage can explain more than 20% of the reduction in the racial earnings and income gap during the civil rights era. Our findings shed new light on the dynamics of labor market inequality in the United States and suggest that minimum wage policy can play a critical role in reducing racial economic disparities.
^ Stigler, George J. (1946). “The Economics of Minimum Wage Legislation”, The American Economic Review,36 (3): 358–365. ISSN 0002-8282, JSTOR 1801842,
^ Strobl, Eric; Walsh, Frank (October 1, 2016). “Monopsony, minimum wages and migration”, Labour Economics,42 : 221–237. doi : 10.1016/j.labeco.2016.09.004, ISSN 0927-5371,
^ Jump up to: a b c d e CBO (February 2014). “The Effects of a Minimum Wage Increase on Employment and Family Income”, Retrieved November 16, 2014,
^ “The Effects on Employment and Family Income of Increasing the Federal Minimum Wage”, Congressional Budget Office, July 8, 2019, Retrieved April 28, 2020,
^ “Federal Reserve Bank of Chicago” (PDF), The Minimum Wage, Restaurant Prices, and Labor Market Structure, August 2007, Retrieved April 28, 2020,
^ Renkin, Tobias; Montialoux, Claire; Siegenthaler, Michael (October 30, 2020). “The Pass-Through of Minimum Wages into US Retail Prices: Evidence from Supermarket Scanner Data”, The Review of Economics and Statistics,104 (5): 890–908. doi : 10.1162/rest_a_00981, hdl : 20.500.11850/448658, ISSN 0034-6535, S2CID 202621766, This paper estimates the pass-through of minimum wage increases into the prices of US grocery and drug stores. We use high-frequency scanner data and leverage a large number of state-level increases in minimum wages between 2001 and 2012. We find that a 10% minimum wage hike translates into a 0.36% increase in the prices of grocery products. This magnitude is consistent with a full pass-through of cost increases into consumer prices. We show that price adjustments occur mostly in the three months following the passage of minimum wage legislation rather than after implementation, suggesting that pricing of groceries is forward-looking.
^ Ashenfelter, Orley; Jurajda, Štěpán (January 1, 2021). “Wages, Minimum Wages, and Price Pass-Through: The Case of McDonald’s Restaurants” (PDF), Retrieved February 3, 2021, We use highly consistent national-coverage price and wage data to provide evidence on wage increases, labor-saving technology introduction, and price pass-through by a large low-wage employer facing minimum wage hikes. Based on 2016–2020 hourly wage rates of McDonald’s Basic Crew and prices of the Big Mac sandwich collected simultaneously from almost all US McDonald’s restaurants, we find that in about 25% of instances of minimum wage increases, restaurants display a tendency to keep constant their wage ‘premium’ above the increasing minimum wage. Higher minimum wages are not associated with faster adoption of touch-screen ordering, and there is near-full price pass-through of minimum wages, with little heterogeneity related to how binding minimum wage increases are for restaurants. Minimum wage hikes lead to increases in real wages (expressed in Big Macs an hour of Basic Crew work can buy) that are one fifth lower than the corresponding increases in nominal wages.
^ Buchwald, Elisabeth (January 30, 2021). “What minimum-wage increases did to McDonald’s restaurants — and their employees”, MarketWatch, They found that the higher cost of labor that results from increasing minimum wages gets passed on to consumers in the form of more expensive Big Macs. More specifically, they estimated that a 10% minimum-wage increase leads to a 1.4% increase in the price of a Big Mac.
^ Rosalsky, Greg (February 16, 2021). “What McDonald’s Shows About The Minimum Wage”, NPR, Ashenfelter says the evidence from increased food prices suggests that basically all of the “increase of labor costs gets passed right on to the customers.” But because low-wage workers are also usually customers at low-wage establishments, this suggests that any pay raise resulting from a minimum wage increase might not be as great in reality as it looks on paper. In econospeak, the increase in their “real wage” — that is, their wage after accounting for the price of the stuff they buy — is not as high, because the cost of some of the stuff they buy, such as fast food, goes up too. “They still get a raise. They just don’t get as big a raise as it may seem,” he says. In effect, a minimum wage increase appears to be a redistribution of wealth from customers to low-wage workers. Ashenfelter says he thinks of it like a kind of sales tax.
^ Dangor, Graison (January 8, 2020). “Raising the Minimum Wage by $1 May Prevent Thousands of Suicides, Study Shows”, NPR.org, Retrieved January 10, 2020,
^ Jump up to: a b Kaufman, John A.; Salas-Hernández, Leslie K.; Komro, Kelli A.; Livingston, Melvin D. (January 3, 2020). “Effects of Increased Minimum Wages by Unemployment Rate on Suicide in the USA”, J Epidemiol Community Health,74 (3): 219–224. doi : 10.1136/jech-2019-212981, ISSN 0143-005X, PMC 7549077, PMID 31911542, S2CID 210087516,
^ Jump up to: a b “Raise the Minimum Wage, Reduce Crime? A New White House Report Links Higher Hourly Incomes to Lower Rates of Law-breaking.” (PDF), COEA, March 3, 2017, retrieved March 3, 2017
^ Jump up to: a b Hashimoto, Masanori (October 18, 1987). “The Minimum Wage Law and Youth Crimes: Time-Series Evidence”. The Journal of Law & Economics,30 (2): 443–64. doi : 10.1086/467144, JSTOR 725504, S2CID 153649565,
^ Overstreet, Dallin. “The Effect of Minimum Wage on Per Capita Income in Arizona: Empirical Analysis.” Poverty & Public Policy 11.1-2 (2019): 156-168. https://onlinelibrary.wiley.com/doi/full/10.1002/pop4.249
^ “OECD Statistics”, Stats.oecd.org. Archived from the original on June 11, 2009, Retrieved January 23, 2018,
^ “The Best Economic News No One Wants to Talk About”, The Atlantic. October 4, 2019. What’s happening here?, Rather, a tight labor market and state-by-state minimum wage hikes have combined to push up wage growth for the poorest workers. The sluggishness of overall wage growth is concealing the fact that the labor market has done wonderful things for wages at the low end.
^ “Characteristics of Minimum Wage Workers, 2016”, BLS Reports,U.S. Bureau of Labor Statistics, Retrieved April 13, 2019,
^ Dube, Arindrajit (February 2017). “Minimum Wages and the Distribution of Family Incomes”. IZA Discussion Paper No.10572, SSRN 2923658,
^ “Minimum Wages and the Distribution of Family Incomes in the United States | Equitable Growth”, Equitable Growth, April 26, 2017, Retrieved January 25, 2018,
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^ Neumark, Shweitzer, Wascher (2005). The Effects of Minimum Wages on the Distribution of Family Incomes: A Non-Parametric Analysis. Journal of Human Resources.
^ Vedder, Richard; Gallaway, Lowell (2002). “The minimum wage and poverty among full-time workers”. Journal of Labor Research,23 : 41–49. doi : 10.1007/s12122-002-1016-4, S2CID 153839645,
^ Sherk, James. “$15 Minimum Wages Will Substantially Raise Prices”, The Heritage Foundation, Retrieved November 11, 2018,
^ Cassleman, Ben (May 20, 2015). “LA’s New Minimum Wage Isn’t Worth Anywhere Close To $15”, FiveThirtyEight, Retrieved May 21, 2015,
^ Liu, John C. (July 2013). “Working but Still Struggling: The Case for a New York City Minimum Wage” (PDF), New York City Comptroller’s Office, Retrieved October 6, 2013,
^ Mankiw, N.G. Essentials of Economics, 8th Edition. Cengage Learning, pp.31.
^ Fowler, Smith (2015). Survey of US Economists on a $15 Minimum Wage, Employment Policies Institute.
^ Whaples (2006). Do Economists Agree on Anything? Yes! The Economists’ Voice.
^ “Over 600 Economists Sign Letter In Support of $10.10 Minimum Wage: Economist Statement on the Federal Minimum Wage”, Epi.org, Retrieved October 18, 2017,
^ “600 Economists Now Back A $10.10 Minimum Wage”, Huffington Post, January 27, 2014.
^ “Economists Hit Back in the Minimum-Wage Wars”, The New York Times, March 13, 2014.
^ “Over 600 Economists Agree: It’s Time To Raise The Minimum Wage – The National Memo – Smart. Sharp. Funny. Fearless”, The National Memo, January 27, 2014, Retrieved October 18, 2017,
^ “Seven Nobel Laureates Endorse Higher U.S. Minimum Wage”, Bloomberg, January 14, 2014.
^ “Seven Nobel Laureates Endorse Increase in U.S. Minimum Wage”, Economicpolicyjournal.coms, Retrieved October 18, 2017,
^ “Poll Results | IGM Forum”, Archived from the original on August 21, 2013, Retrieved December 6, 2013,
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^ Krugman, Paul (February 17, 2013). “Opinion – Raise That Wage”, The New York Times, Retrieved October 18, 2017,
^ Sowell, Thomas (2004). Basic economics : a citizen’s guide to the economy (Rev. and expanded ed.). New York: Basic Books. ISBN 0-465-08145-2, OCLC 52471611,
^ Teresa Tritch, Where Do Democrats Stand on the Minimum Wage?, New York Times (July 6, 2016).
^ Jump up to: a b Russell Berman, Where the Minimum-Wage Fight Is Being Won, The Atlantic (May 4, 2015).
^ Mike Lillis, $15 minimum wage divides Dems, The Hill (July 28, 2016).
^ Alex Seitz-Wald, Democrats Add $15 Minimum Wage to Platform, NBC News (July 8, 2017).
^ David Weigel, Democrats back $15 minimum wage, but stalemate on Social Security, Washington Post (July 9, 2016).
^ Jump up to: a b c Jamelle Bouie, Honest Work, Slate (May 13, 2014).
^ Dave Jamieson, GOP Candidates Resoundingly Reject The Idea of a Minimum Wage Hike, HuffPo (November 10, 2015).
^ Ramsey Cox, GOP blocks minimum-wage hike, The Hill (April 30, 2014).
^ Rich Kirchen, Paul Ryan opposes minimum wage hike, says it would nix jobs, Milwaukee Business Journal (September 2, 2014).
^ 75 economists back minimum wage hike Archived 1 March 2015 at the Wayback Machine CNN Money, 14 January 2014
^ Over 600 Economists Sign Letter In Support of $10.10 Minimum Wage Archived 9 October 2017 at the Wayback Machine Economist Statement on the Federal Minimum Wage, Economic Policy Institute
^ “Sanders Introduces Bill for $15-an-Hour Minimum Wage”, Sen. Bernie Sanders, Archived from the original on September 6, 2015, Retrieved September 15, 2015,
^ The rapid success of Fight for $15: ‘This is a trend that cannot be stopped’ Archived 1 December 2016 at the Wayback Machine S. Greenhouse, The Guardian, US-News, 24 July 2015
^ Alex Seitz-Wald, Democrats Advance Most Progressive Platform in Party History Archived 1 August 2016 at the Wayback Machine, NBC News (10 July 2016).
^ Oakland, Jana Kasperkevic Ronnie Cohen in (April 14, 2016). “Fight for $15 protesters across US demand living wage in day of action”, The Guardian, ISSN 0261-3077, Retrieved December 18, 2017,
^ “2016 Minimum Wage by State”, ncsl.org, NCSL, Retrieved October 23, 2016,
^ Medina, Jennifer; Scheiber, Noam (May 19, 2015). “Los Angeles Lifts Its Minimum Wage to $15 Per Hour”, New York Times, Retrieved May 20, 2015,
^ Staff (May 20, 2015). “A $15 Minimum Wage Bombshell in Los Angeles”, New York Times, Retrieved May 20, 2015,
^ “New York State’s Minimum Wage”, Welcome to the State of New York, September 20, 2016, Retrieved April 16, 2017,
^ Enforcement, Division of Labor Standards. “Minimum wage”, Dir.ca.gov, Retrieved April 16, 2017,
^ “$15 Minimum Wage, Required Paid Leave Are Coming To Mass., After Gov. Baker Signs ‘Grand Bargain’ “, www.wbur.org, Retrieved April 13, 2019,
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^ Bolton, Alexander (April 8, 2014). “Reid punts on minimum-wage hike”, The Hill, Retrieved April 9, 2014,
^ Bolton, Alexander (April 4, 2014). “Centrist Republicans cool to minimum wage hike compromise”, The Hill, Retrieved April 9, 2014,
^ Sullivan, Andy (September 15, 2014). “A minimum-wage hike finds hope in U.S. heartland”, Reuters, Retrieved September 15, 2014,
^ Weigel, David (April 26, 2017). “Sanders and 21 Democrats introduce bill to raise minimum wage to $15 an hour”, The Washington Post, ISSN 0190-8286, Retrieved December 18, 2017,
^ “H.R.15 – 115th Congress (2017–2018): Raise the Wage Act”, www.congress.gov, May 25, 2017, Retrieved April 13, 2019,
^ Carney, Jordain (May 25, 2017). “Sanders, Democrats introduce $15 minimum wage bill”, TheHill, Retrieved December 18, 2017,
^ Limitone, Julia (May 24, 2016). “Fmr. Mcdonald’s Usa Ceo: $35k Robots Cheaper Than Hiring At $15 Per Hour”, Fox Business, Archived from the original on July 13, 2016.
^ Campbell, Alexia Fernández (October 2, 2018). “Amazon is raising its minimum wage to $15 for US workers”, Vox, Retrieved January 24, 2021,
^ Yglesias, Matthew (October 3, 2018). “Why Amazon is fighting for $15”, Vox, Retrieved January 24, 2021,
^ “Most See Inequality Growing, but Partisans Differ over Solutions”, People-press.org, January 23, 2014, Retrieved October 18, 2017,
^ DeSilver, Drew (January 4, 2017). “5 facts about the minimum wage”, Pew Research Center, Overall, 52% of people favored increasing the federal minimum to $15 an hour, but that idea was favored by just 21% of Trump supporters (versus 82% of Clinton backers). And while large majorities of blacks and Hispanics supported a $15 federal minimum wage, 54% of whites opposed it.
^ “Lake Research Partners. Public Support for Raising the Minimum Wage. February 2012” (PDF), Nelp.3cdn.net, Archived from the original (PDF) on May 14, 2017, Retrieved October 18, 2017,
^ “Majority of Americans support $15 minimum wage, Reuters/Ipsos poll shows”, MSN,
^ “United States Minimum Wage By State 2013”, Minimum-Wage.org, Retrieved June 13, 2013,
^ “Employee Rights Under the Fair Labor Standards Act” (PDF), Wage and Hour Division (WHD), United States Department of Labor, Retrieved September 3, 2010,
^ “Minimum Wages for Tipped Employees”,U.S. Department of Labor,
^ “Exemptions to the Minimum Wage and the FLSA”, Minimum-Wage.org, May 25, 2011.
^ Hopkins, Madison. “Missouri Allows Some Disabled Workers to Earn Less Than $1 an Hour. The State Says It’s Fine If That Never Changes”, ProPublica, Retrieved November 16, 2022,
^ “Alaska bars employers from paying disabled workers less than minimum wage”, Vox. February 23, 2018, Retrieved December 12, 2019,
^ Jump up to: a b Emanuelson, Eric I. Jr. (June 29, 2021). “Hawaii Repeals “Disability Subminimum Wage” “, The National Law Review, Archived from the original on July 4, 2021, Retrieved July 10, 2021,
^ “Fact Sheet #32: Youth Minimum Wage – Fair Labor Standards Act” (PDF), Dol.gov, Retrieved October 18, 2017,
^ “What is the minimum wage for workers who receive tips? What is the minimum wage for workers who receive tips?”, eLaws, United States Department of Labor, Retrieved November 5, 2012,
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^ Jump up to: a b “New York City, New York Minimum Wage 2019 – Minimum-Wage.org”, www.minimum-wage.org, Retrieved April 13, 2019,
^ “Pritzker signs bill to increase minimum hourly wage to $15 by 2025”, Chicago Sun-Times, Retrieved February 20, 2019,
^ “Minimum Wage Tracker”, Economic Policy Institute, Retrieved December 8, 2017,
^ Jump up to: a b c d e “Minimum Wages for Tipped Employees”, Wage and Hour Division (WHD), United States Department of Labor. January 1, 2013, Retrieved November 25, 2017,
^ “Bentley signs bill blocking Birmingham minimum wage”, The Montgomery Advertiser, Retrieved February 8, 2019,
^ “Alabama HB174 | 2016 | Regular Session”, LegiScan, Retrieved February 8, 2019,
^ Jump up to: a b Thomas A. Davis; Tammy L. Baker; David T. Wiley (December 16, 2019). “Full Eleventh Circuit Finds that Plaintiffs Lack Standing in Alabama Lawsuit Challenging State Prohibition of Local Minimum Wage Laws”, Wage & Hour Law Update, Jackson Lewis P.C.
^ “MINIMUM WAGE STANDARD AND OVERTIME HOURS”, labor.alaska.gov, Retrieved January 2, 2021,
^ “LABOR DEPARTMENT – MINIMUM WAGE”, Retrieved January 1, 2021,
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^ Dempsey, Geoff (April 4, 2019). “Phoenix Council Raises City Employee Minimum Wage To $15”, Patch, Retrieved November 20, 2020,
^ Stone, Kevin (November 20, 2019). “Phoenix extends $15 minimum wage to year-round part-time workers”, KTAR.com, Retrieved November 20, 2020,
^ “Minimum Wage and Overtime”, Retrieved January 1, 2021,
^ Jump up to: a b “California Labor Code § 1182.12(b)(1)”, California Office of Legislative Counsel, April 4, 2016, Retrieved June 5, 2021,
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^ Levine, Nathaniel (December 28, 2017). “California’s minimum wage rises again on Jan.1. Here’s how much”, The Sacramento Bee, Retrieved December 29, 2017,
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^ “City of Mountain View – Mountain View Minimum Wage Ordinance”, www.mountainview.gov, Retrieved January 1, 2021,
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What did David Ricardo argue?

David Ricardo’s family was descended from Iberian Jews who had fled to Holland during a wave of persecutions in the early 18th Century.
His father, a stockbroker, emigrated to England shortly before Ricardo’s birth in 1772.
David Ricardo was his third son (out of seventeen!).
At the age of fourteen, after a brief schooling in Holland, Ricardo’s father employed him full-time at the London Stock Exchange, where he quickly acquired a knack for the trade.

He became immensely rich in a very short while.
In 1814, at the age of 41, finding himself “sufficiently rich to satisfy all my desires and the reasonable desires of all those about me” (Letter to Mill, 1815), Ricardo retired from city business, bought the estate of Gatcomb Park and set himself up as a country gentleman.

(cf. Thomas Moore’s poems on Cash, Corn and Catholics ) Ricardo’s interest in economics was sparked by a chance reading of Adam Smith ‘s Wealth of Nations (1776) when he was in his late twenties. Bright and talkative, Ricardo discussed his own economic ideas with his friends, notably James Mill, But it was only after the persistent urging of the eager Mill that Ricardo actually decided to write them down.

He wrote a pair of tracts (1810, 1811) articulating their arguments and outlining what has since become known as the “classical approach” to the theory of money.
In these very same tracts, Ricardo also suggested the impossibility of a ” general glut ” – an excess supply of all goods – in an economy.
This provoked the Rev.

Ricardo stood firm in his support of Say’s Law and dismissed Malthus’s underconsumption thesis as theoretically impossible.
Yet, in spite of their disagreements on economic doctrines, they took to each other personally and fostered a legendary friendship.
Ricardo even passed on investment tips to Malthus – the most famous case being when Ricardo urged Malthus to invest in the bond market in anticipation of a British victory at Waterloo.

Coincidentally, this principle was discovered simultaneously and independently by Malthus, Robert Torrens and Edward West, (more astoundingly, all of them published their tracts within three weeks in February, 1815!) In his 1815 Essay, Ricardo formulated his theory of distribution in a one-commodity (“corn”) economy.

The argument that the relative “natural” prices of commodities are determined by the relative hours of labor expended in their production. Indeed, he began his 1817 book by criticizing Adam Smith ‘s alternatives – the “labor-commanded” and “adding up” theories of value – because, he argued, that made value a function of wages and thus income distribution.

This is what Stigler (1958) has called Ricardo’s “93% labor theory of value”. The second solution was to find a commodity which has the average capital per worker, so that its price would reflect labor-embodied value and thus not vary with changes in distribution. He called this the “invariable standard of value”,

Despite his search, Ricardo never found this standard commodity. On his death, an incomplete paper entitled “The Invariable Standard of Value” was found on his desk. Eventually, Karl Marx (1867) proposed one way out of it, but the proper solution would have to wait until Piero Sraffa (1960). A little tripped up on value, Ricardo (1817) pressed on nonetheless.

He then added on a theory of growth, Specifically, with profits determined in the manner given above, then the amount of capitalist saving, accumulation and labor demand growth could also be deduced. This, in turn, would increase population and thus bring more land, of less and less quality, into cultivation.

Ricardo suggested two things which might hold this law of diminishing returns at bay and keep accumulation going at least for a while: technical progress and foreign trade.
On technical progress, Ricardo was ambivalent.
One the one hand, he recognized that technical improvements would help push the marginal product of land cultivation upwards and thus allow for more growth.

In this case, either wages must fall or workers must be fired.
Some of these unemployed workers may be mopped up by the greater amount of accumulation that the extra profits will permit, but it might not be enough.
A pool of unemployed might remain, placing downward pressure and wages and leading to the general misery of the working classes.

Ricardo’s argument was that there are gains from trade if each nation specializes completely in the production of the good in which it has a “comparative” cost advantage in producing, and then trades with the other nation for the other good. Notice that the differences in initial position mean that the labor theory of value is not assumed to hold across countries – as it should be, Ricardo argued, because factors, particularly labor, are not mobile across borders.

With his 1817 treatise, Ricardo took economics to an unprecedented degree of theoretical sophistication. He formalized the Classical system more clearly and consistently than anyone before had done. For his efforts, he acquired a substantial following in Great Britain and elsewhere – what became known as the “Classical” or “Ricardian” School,

Resources on David Ricardo

What was Ricardos labour theory of value?

Adam Smith and David Ricardo – Adam Smith held that, in a primitive society, the amount of labor put into producing a good determined its exchange value, with exchange value meaning, in this case, the amount of labor a good can purchase. However, according to Smith, in a more advanced society the market price is no longer proportional to labor cost since the value of the good now includes compensation for the owner of the means of production: “The whole produce of labour does not always belong to the labourer.

He must in most cases share it with the owner of the stock which employs him.” According to Whitaker, Smith is claiming that the ‘real value’ of such a commodity produced in advanced society is measured by the labor which that commodity will command in exchange but ” disowns what is naturally thought of as the genuine classical labor theory of value, that labor-cost regulates market-value.

This theory was Ricardo’s, and really his alone.” Classical economist David Ricardo’s labor theory of value holds that the value of a good (how much of another good or service it exchanges for in the market) is proportional to how much labor was required to produce it, including the labor required to produce the raw materials and machinery used in the process.

David Ricardo stated it as, “The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour.” In this connection Ricardo seeks to differentiate the quantity of labour necessary to produce a commodity from the wages paid to the laborers for its production.

Therefore, wages did not always increase with the price of a commodity. However, Ricardo was troubled with some deviations in prices from proportionality with the labor required to produce them. For example, he said “I cannot get over the difficulty of the wine, which is kept in the cellar for three or four years, or that of the oak tree, which perhaps originally had not 2 s.

Expended on it in the way of labour, and yet comes to be worth £100.” (Quoted in Whitaker) Of course, a capitalist economy stabilizes this discrepancy until the value added to aged wine is equal to the cost of storage.
If anyone can hold onto a bottle for four years and become rich, that would make it hard to find freshly corked wine.

There is also the theory that adding to the price of a luxury product increases its exchange-value by mere prestige. The labor theory as an explanation for value contrasts with the subjective theory of value, which says that value of a good is not determined by how much labor was put into it but by its usefulness in satisfying a want and its scarcity.

Ricardo’s labor theory of value is not a normative theory, as are some later forms of the labor theory, such as claims that it is immoral for an individual to be paid less for his labor than the total revenue that comes from the sales of all the goods he produces.
It is arguable to what extent these classical theorists held the labor theory of value as it is commonly defined.

For instance, David Ricardo theorized that prices are determined by the amount of labor but found exceptions for which the labor theory could not account. In a letter, he wrote: “I am not satisfied with the explanation I have given of the principles which regulate value.” Adam Smith theorized that the labor theory of value holds true only in the “early and rude state of society” but not in a modern economy where owners of capital are compensated by profit.

What is David Ricardo theory of distribution?

David Ricardo, in On the Principles of Political Economy and Taxation (1817), held that the landlords would receive an increasing part of the national income while capitalists would get less and less and that this shift in distribution would lead to economic stagnation.