LETTER: Yes to nirvana economics

From Mr Richard Dickens

and others

Sir: In response to Deepak Lal's "refutation" of minimum wages ("Minimum wage, maximum woe", 15 February), which criticises recent economic approaches that do not find a harmful role of minimum wages (what Professor Lal likes to call "nirvana economics"), we would like to point out the very blinkered view Professor Lal takes.

A more careful reading of the available evidence suggests that the impact of minimum wages on employment in the United States and Britain is minimal. And, rather than being a poor anti-poverty device, those individuals who are more likely to be affected by minimum wages do seem to come from poorer families. (See several of our recent pieces of work which are available from the Centre for Economic Performance at LSE).

If this is nirvana economics, it is surely preferable, and more useful in informing the current policy debate on minimum wages, to what sounds like mean spirit.

Yours sincerely,

RICHARD DICKENS, STEPHEN MACHIN, ALAN MANNING, STEPHEN WOODLAND

Centre for Economic Performance

London School of Economics

and Political Science

London, WC2

16 February