What the minimum wage really isMike Rappaport

Greg Mankiw describes an economic policy to help poor workers:

1. A wage subsidy for unskilled workers, paid for by
2. A tax on employers who hire unskilled workers.

Now,if you think like an economist, you might wonder about the logic ofpart 2 of this proposal. You might say, “A tax on the hiring ofunskilled workers would discourage their employment, offsetting some ofthe benefits they would get from the wage subsidy. It would be betterto finance the wage subsidy with a more general tax, rather than with atax targeted specifically on employers of unskilled workers.”

Of course, that economic policy?  The minimum wage.