Supporters of the $15 minimum wage often seek to deflect from the truth, and promote their union-driven agenda by pointing to an argument made by some economists claiming that no evidence exists indicating raising the minimum wage will cost people their jobs. As columnist David Brooks points out in a recent article, that claim is just not true. Brooks,
“David Neumark of the University of California, Irvine, and William Wascher of the Federal Reserve have done their own studies and point to dozens of others showing significant job losses.
“Recently, Michael Wither and Jeffrey Clemens of the University of California, San Diego, looked at data from the 2007 federal minimum-wage hike and found that it reduced the national employment-to-population ratio by 0.7 percentage points (which is actually a lot), and led to a 6-percentage-point decrease in the likelihood that a low-wage worker would have a job.
“Because low-wage workers get less work experience under a higher minimum-wage regime, they are less likely to transition to higher-wage jobs down the road. Wither and Clemens found that two years later, workers’ chances of making $1,500 a month was reduced by 5 percentage points.”
Making matters worse, increasing the minimum wage does not accomplish its intended goal of fighting poverty. Brooks,
“A 2010 study by Joseph Sabia and Richard Burkhauser found that only 11.3 percent of workers who would benefit from raising the wage to $9.50 an hour would come from poor households. An earlier study by Sabia found that single mothers’ employment dropped 6 percent for every 10 percent increase in the minimum wage…
“A study by Thomas MaCurdy of Stanford built on the fact that there are as many individuals in high-income families making the minimum wage (teenagers) as in low-income families. MaCurdy found that the costs of raising the wage are passed on to consumers in the form of higher prices. Minimum-wage workers often work at places that disproportionately serve people down the income scale. So raising the minimum wage is like a regressive consumption tax paid for by the poor to subsidize the wages of workers who are often middle class.”
Brooks goes on to speculate that a higher minimum in large cities won’t “produce massive dislocation.” Of course, as Brooks admits, whether or not that proves correct remain unknown. Luckily for inquisitive economists everywhere, Seattle has volunteered itself of the experiment—an experiment that is already producing plenty of unintended consequences.