Greenspan on minimum wage

Doug Henwood dhenwood at
Wed Jul 22 18:03:44 PDT 1998

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.


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