Evidence that lowering taxes on the rich will lead to automatic job growth: zero.
Evidence that raising the minimum wage will lead to automatic job loss: also zero.
If anything, the evidence points to the opposite of both of these.
Originally shared by Keith Wilson
We have been raising the minimum wage for 78 years, and as a new study clearly reveals, 78 years of minimum-wage hikes have produced zero evidence of the “job-killing” consequences these headline writers want us to fear.
The usual view of economists is that raising the minimum wage reduces employment for people getting minimum wage. Currently that’s about 2% of all workers. Anyone who offers changes in the overall unemployment rate as evidence against that effect is either ignorant or dishonest, since even quite a large change in the unemployment rate for 2% of the workforce would have an invisibly small effect on the overall unemployment rate.
Isn’t that obvious? If it is, does it give you any reason to reduce your confidence in the information source you are citing?
So is this untrue, then?
‘To be clear, I am not suggesting that there’s no limit to how high we can raise the minimum wage. But minimum-wage opponents are not haggling over a number. They are not making a nuanced argument that the minimum wage might be bad for some people if it’s too high or phased in too fast or if the economy is too weak to absorb the change.
‘No, their core claim is that the minimum wage always hurts the whole economy — that it will always reduce growth— that it is always a sure-fire “job-killer.”‘
Is nobody, or hardly anybody, claiming that?
And can you provide a citation for the 2% figure?
Mike Reeves-McMillan I got the 2% figure by a little googling. Minimum wage workers are 3.9% of hourly wage workers and hourly wage workers are a little more than 50% of all workers. You can check those numbers for yourself.
I don’t know of any economist who says that the minimum wage “always hurts the whole economy–that it will always reduce growth.” Can you quote me an example?
The standard argument by economists for at least the past fifty years is that the minimum wage prices some low skill labor out of the market. I haven’t followed the recent literature very carefully, but I remember old figures on the effect on non-white teenage employment, that being a labor market sector with a lot of people at the minimum wage.
The argument is straightforward. When you raise the price of something people buy less of it. That applies to inputs as well as consumption goods. Raising the minimum wage from (say) ten dollars to eleven dollars doesn’t make the labor of someone who earns twenty dollars an hour more expensive. But it does make the labor of people who earned ten dollars an hour more expensive, so less of it gets used.
I can’t prove what all economists say but I can at least demonstrate what I said on the subject more than forty years ago. The following is a quote from my Machinery of Freedom. If you want to check it, the second edition is a free pdf download from my web page:
http://www.daviddfriedman.com/The_Machinery_of_Freedom_.pdf
“The main effect of the minimum wage law seems to be that unskilled workers, who frequently are not worth the minimum wage to any employer, are deprived of their jobs. (This effect is seen in the dramatic rise in the unemployment rate of nonwhite teenagers which consistently follows rises in the minimum wage.)”
OK, fair enough.