Economy
Does Raising the Minimum Wage Kill Jobs?
August 28th 2014
By:
Talk to any opponent of raising the minimum wage and the first thing they'll tell you is that while in theory it sounds nice, it hurts the very people you're trying to help by cannibalizing jobs.
Yet the job killer argument is suspect-- at best. Look at the data:
- Professors David Card and Alan Krueger: increasing the minimum wage leads to no job loss
- A Chicago Fed study: No significant loss of jobs from a minimum wage hike:
- An Economic Policy Institute study: a raise in the wage will create 85,000 jobs
- A Center for American Progress study: raising the minimum wage has no discernible effect on employment levels.
- A Center for Economic and Policy Research study: the 13 states that increased their minimum wages in 2013 have had stronger employment growth than the 37 states that didn't.
- A Los Angeles Economic Roundtable report: raising the minimum wage will generate more than 60,000 jobs
- A Congressional Budget Office Study: raising the minimum wage will cost the U.S. 500,000 jobs.
Is there an overwhelming conclusion? Absolutely not. With the exception of the CBO Study, most research indicates negligible, if non-existent, job loss, while conveying a minor economic stimulus from raised wages (due to the increased consumer spending of people having a few extra bucks in their pocket), which might actually create jobs.
So since the job killer argument is a pretty much a wash, let's look at a different trend: economic inequality.
No study disputes this:
- CEO to Worker Pay has ballooned more than 1,000 percent since the 1950's.
Or this:
- The average pay of a top restaurant CEO in 2013 was 721 times more than minimum wage workers.
Or this:
- data from the US Census reveals that income levels of the median middle class household have remained flat since 1989.
The logical conclusion? The argument on behalf of reducing income inequality greatly outweighs the argument that the minimum wage kills jobs.