Throw a rock into the punditsphere and you’ll hit someone arguing that minimum-wage increases kill jobs. We shouldn’t boost the wage, these people argue, because companies will hire fewer of the lowest-paid workers—the very workers who are supposed to be helped. Meanwhile, social movements like Fight for 15 demand a higher minimum wage in order to raise the living standards of these workers.

To a degree, the relationship between the minimum wage and employment is still debated among economists. When thirty-eight of them were polled last year, they were split as to whether a $9 hourly wage would cost jobs, with about a quarter unable to say one way or another. The debate pits the Congressional Budget Office, which found that a $10.10 wage would reduce employment by 0.3 percent, against economists like David Cooper, who found that a higher minimum wage would support the creation of 85,000 new jobs.

So which is it: Does raising the minimum wage boost living standards for workers, or does it kill jobs for those who need them most?


5 thoughts on “The Score: Does the Minimum Wage Kill Jobs?

  1. If the minimum wage would be about $100/h, then it would certainly destroy jobs. Though a modest increase of minimum wage might result in more consumption and hence stimulate the economy through increased demand. But I think it ultimately depends on multiple other factors whether raising minimum wage would be good or bad.


    • Since we now have actual evidence on the effects of minimum wage laws, as detailed in this article, the debate is ceasing to be theoretical. In the U.S., those states which have higher minimum wage laws are generally exhibiting greater economic growth and job creation compared with those states which do not. The Keynesian principle of demand as key to middle class prosperity is a historically demonstrable concept. Conversely, supply-side economics have proved to produce the opposite – more wealth inequality and social stratification. Regarding the idea of a $100/h minimum wage, that is a classic red herring argument in my opinion.

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