Thursday, May 2, 2013

Hobby Lobby Raises their Minimum Wage

Hobby Lobby, a craft based retail store, raised the minimum wage they pay their full-time and part-time employees last year.  This is a different type of minimum wage than what I talk about in class.  In class, the minimum wage is a legal floor on the price all employers can pay their employees, where in this case this applies only to Hobby Lobby.  In terms of economic welfare, the main effect is a transfer of surplus from the store owners (shareholders) to store employees.  As an economist, I do not have much to say since this is a decision by the firm to constrain its wage setting, not a constraint placed on the firm by another party - the government.

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