Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
October 31, 2014

Will an Increase in the Minimum Wage Really Hurt Jobs?

Christopher Flavelle uses the restaurant industry as a test case for analyzing the impact of a minimum wage increase on employment levels.

imSzyZyd.MEE Will an Increase in the Minimum Wage Really Hurt Jobs?

Flavelle: “Since 1990, the federal minimum wage has risen seven times. If the arguments of restaurant owners were accurate, you’d expect those increases to correspond with a drop in the number of people working at restaurants.”

“The only dips in restaurant employment came during the recessions of 1990-1991 and 2008-2009. Although those drops followed increases in the minimum wage, increases outside of recessions — in 1996, 1997 and 2007 — didn’t lead to reductions in employment levels.”

 

  • zappa24

    This isn’t the most rigorous way to determine if there is an effect on employment when raising the minimum wage. On the other hand, most of the more recent rigorous studies (those done in the last couple of decades) have shown similar results. Those that argue that raising the minimum wage necessarily increases unemployment fall into the trap of assuming that the basic theoretical model perfectly reflects reality when often times the model used is too basic and uses assumptions that don’t reflect what is actually going on.

  • http://foundersfollies.blogspot.com/ Chredon

    The entire concept of higher minimum wages having a negative impact on employment is just plan stupid.

    If I own a business, I’m going to hire the people I need to meet the demand generated by my customers. I’m not going to turn away customers because I don’t want to pay people $9.50 an hour. Turning away willing customers is the best way to ruin your business.

    What I will do is raise prices a little. That might lose me a few customers. On the other hand, I might get more customers since more people might be able to buy my product now that they’re making more money.

    If I were King For A Day, I would have two levels of minimum wage – one for people who are still claimed as a dependent on their parents’ taxes, and a higher one for people who are paying their own way. I don’t think a kid who is either supplementing the family income or just earning some walking-around money needs to be paid as much as someone who is trying to support themselves and their family.

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