Overestimating Consequences of Minimum Wage?

Lindau Meetings of Nobel Laureates: Are We Overestimating the Negative Consequences of a Minimum Wage?

15 Nobel Prizewinners for Economics and Peace Will Be Discussing the Implications of Globalisation for the Labour Markets at This Year s Laureate Meeting in Lindau from August 20th 23rd

• 300 Highly Talented up-and-Coming Economists from 58 Countries Will Be Taking Part in the Event

• Journalists Are Invited to Report on the Event

LINDAU, Germany (BUSINESS WIRE) August 14,2008

Robert Solow, an American winner of the Nobel Prize in Economics, warns against the possible stigmatisation of minimum wages in high-wage countries such as Germany. In theory, minimum wages threaten employment in the low-income sector. Yet there is hardly any practical evidence to confirm such a phenomenon, says Solow prior to the 3rd Lindau Meeting in Economic Sciences. The reason: companies can often balance out the increase in labour costs with increased productivity.

Solow will be presenting the most recent results of his minimum wage research in Lindau. The prizewinning economist from the Massachusetts Institute of Technology (MIT) in Cambridge will be meeting with 14 other Nobel Laureates and 300 of the best up-and-coming economists from 58 countries from August 20th 23rd.

Over the course of a long-term study, Solow compared the effects of minimum wages in several industrial countries. He included labour markets in the USA as well as Germany, Denmark, France, Great Britain, and the Netherlands. The conventional contrast between low wages and high employment in the U.S. versus higher wages and low employment in Europe is not nearly as clear as expected, as summarised by Solow. In addition to minimum wages, his study also examined the significance of tariff autonomy and a state-sponsored health care and social security system for the labour market.

Solow will be dealing with the issue of minimum wages in both a lecture and a panel discussion with his colleagues George Arthur Akerlof, Finn E. Kydland, and Robert Fogel at this year s Laureate Meeting in Lindau. Fogel, a Nobel prizewinner who lives and teaches in Chicago, is counting on the positive effects of globalization: Every country will profit from the growth of the global economy, he commented briefly prior to this year s Lindau Meeting in Economic Sciences. Fogel does not see minimum wages posing any major threats, at least not for the low-wage sector. Workers in that sector are part of service industries that are not competing internationally, Fogel says, naming the fast food industry as an example.

We re expecting a fascinating discussion that will provide us with a wealth of new insights , predicts Professor Wolfgang Schürer, Chairman of the Board of the Foundation Lindau Nobelprizewinners Meetings at Lake Constance . The Meeting s programme includes the most current topics in economics, politics, and society: employment, the financial crisis, and Social Business (Muhammad Yunus).

The Lindau Meeting in Economic Sciences was introduced in 2004 and takes place every two years. Included in this year s participants are a total of 14 economists who have been awarded The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, as well as Nobel Peace Prize-winner Muhammad Yunus. The founder of the Grameen Bank in Bangladesh was recognised as a pioneer in microcredit and therefore honoured for creating economic and social development from below .

The Nobel Laureate Meetings in Lindau have been organised in the scientific disciplines of physics, chemistry, and medicine or physiology by the Council for the Lindau Nobel Laureate Meetings since 1951, working in cooperation with the Foundation since the year 2000. 2004 marked the addition of the Meetings in Economic Sciences. The 58th Meeting of the Nobel Laureates took place in July 2008 and was dedicated to physics. Chairman of the Foundation Wolfgang Schürer describes the goal of the meetings as follows: Science lives from dialogue. The conferences provide young scientists from all over the world the opportunity to deepen their knowledge of relevant issues in their fields of expertise with the respective experts. The Nobel Laureate Meetings therefore make a great contribution in establishing international scientific networks as well.

300 up-and-coming economists from 58 countries will be taking part in this year s meeting. They were chosen based on their outstanding performance from a total of 2500 applicants. 30 national banks and international institutions such as the Bretton Woods Institutions the World Bank and the International Monetary Fund nominated their top young economists. 88 scientists qualified from Germany. In addition to the Universities of Cologne, Munich, and Heidelberg, the Kiel Institute of World Economics and the Max Planck Institute of Economics in Jena are just a few establishments that will be represented at the 3rd Lindau Meeting of Economic Sciences at Lake Constance.

Journalists are invited to participate in the meeting. We can gladly offer you our support in scheduling interviews with the scientists in attendance. Accreditations are available at:

http://lindau-nobel.de/Accreditation.AxCMS?ActiveID=1224

Programme excerpts:

The discussion of correlations between globalization and the labour markets during the 3rd Meeting of Economic Sciences at Lake Constance is available as a live stream at www.lindau-nobel.de and as a Video-on-Demand following the meeting.

Panel discussion:

Globalization, Technical Progress and Labor Markets Causes and Consequences of the Bifurcation of Wages and Income with Laureates George Arthur Akerlof, Finn E. Kydland, Robert Fogel and Robert Solow (Saturday, August 23rd at 10:15am at the University of St. Gallen).

Lectures:

Robert Fogel: Forecasting Changes in the Cost of Health Care: 2000-2040 (Friday, August 22nd at 9:00am in Lindau)

Robert Solow: Low-wage Work in Europe and America (Friday, August 22nd at 11:50am in Lindau)

The complete programme is available at our website:

http://lindau-nobel.de/PublicMeetingProgram.AxCMS?Meeting=272

ENDS

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