By PROUT
The findings of one of the 2021 Nobel prize winners in economics, David Card, lends credence to one of the bedrock proposals of PROUT–guaranteed minimum necessities to everyone through guaranteed gainful (better if also meaningful) employment.
Card won the Nobel “for pioneering research that showed an increase in minimum wage does not lead to less hiring…, challenging commonly held ideas.” The paper, “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania”, which he co-wrote with Alan B. Krueger (Krueger, who died in 2019, did not win the Nobel because the prize, as a rule, is never given posthumously), is cited as among the works that won him the Nobel–for empirical contributions to labor economics.
The study cited above, also called a “natural experiment” (as opposed to a “controlled experiment”), was conducted in 1992 (yes, it can take decades before landmark contributions to a field of study can be recognized) when the state of New Jersey in the US set a higher minimum wage while its neighboring state of Pennsylvania (which can be likened to a control group, with New Jersey as the experimental group) did not follow suit.
The study concluded that “Contrary to the central prediction of the textbook model of the minimum wage, but consistent with a number of recent studies based on cross-sectional time-series comparisons of affected and unaffected markets or employers, we find no evidence that the rise in New Jersey’s minimum wage reduced employment at fast-food restaurants in the state.” In fact (drumroll), “the increase in the minimum wage increased employment.”
How does this relate to PROUT’s proposal of guaranteed minimum necessities to all through guaranteed gainful employment? That this idea should not be considered utopian.
A minimum wage that can provide a living wage to everybody can be adopted without necessarily reducing the employment level.
However, many things have to be in place before this can be materialized wholesale–the government must stand ready to guarantee employment to everyone, worker-owned cooperatives must be mainstreamed to guarantee lasting employment in the private sector, and economic activity must focus on the common consumption needs of the people to ensure steady demand for goods and services, among others.**If you want to read similar articles go to this link: https://www.facebook.com/PROUTManila/
