Greenspan on minimum wage

[Doug Henwood]

I'm listening to Alan Greenspan's testimony before the House Banking
Committee from today, available in RealAudio from the Wall Street Journal's
web site. In his prepared testimony, Greenspan said that while our tight
labor market has allowed the "chronically unemployed" to find work they
wouldn't otherwise have found, the major problem of the U.S. economy today
is that employment growth has been running at twice the rate of population
growth (i.e., unemployment is getting too low). About 20-22 minutes into
the Q&A stream, Barney Frank asked Greenspan if the minimum wage increases
of 1996 and 1997 had any damaging effects on employment. Greenspan said
that fewer minimum wage workers are employed today than would have been had
there been no raise. Frank pressed him, saying that if any more people were
working, Greenspan would have boosted rates and thrown them out of work, so
how can he say there's a problem with a higher minimum wage? Greenspan
wouldn't budge, though.

Doug