Today’s Solutions: July 26, 2024

US-based economist David Card is one of this year’s recipients of the Nobel prize for economics, awarded for his work which helps answer one of the field’s most contested ideas surrounding minimum wage. ​​Card is Canadian born but based at the University of California, Berkeley.

So what are the benefits of raising the minimum wage?

Card’s research is based around the minimum wage increase in the state of New Jersey. He found that an increase in the minimum wage has no impact on the number of employees and employment rates in the state, strengthening the argument that minimum wage increases benefit low-income populations without detriment to the economy.

Drawing from initial studies with late research partner Alan Krueger, Card determined that the negative effects of increasing the minimum wage are minimal, and even smaller than they thought three decades ago. Card also found that the incomes of native-born citizens benefit from new immigrants, while immigrants who arrived earlier are actually the ones who stand to lose the most at the arrival of new immigrants.

Card shares the Nobel prize in economics this year with Joshua Angrist from the Massachusetts Institute of Technology and Dutch-born Guido Imbens from Stanford University who were recognized for their work studying issues that do not rely on traditional scientific methods.

The Royal Swedish Academy of Sciences credits the work of the three scientists saying it ​​“completely reshaped empirical work in the economic sciences.”

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