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Jodi Beggs

Economists Divided on the Impact of the Minimum Wage...

By February 25, 2013

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One of the proposals in President Obama's State of the Union address was an increase in the federal minimum wage to $9 per hour from its current level of $7.25 per hour. Basic economic theory suggests that this policy would increase unemployment, both because it would make it less attractive for firms to hire workers and because the higher guaranteed wage would make it more attractive for people to look for work.

The evidence regarding the impact of changes in the minimum wage is mixed, however. Here is a good overview of the evidence as well as some hypotheses as to how employers might handle minimum-wage changes in practice.

Comments

February 25, 2013 at 10:38 pm
(1) Sir Hiss says:

The amount of disagreement on this subject is much less than this article or Jodi suggests. The article doesn’t cover the subject in a comprehensive enough manner for the reader to make an informed decision. Traditional thought that holds that the person who actually gets hired for the job is the main benefactor, even if a number of postions are cut for them to prosper. Others in support of min wage only support it if the wage is set so low that no one would work for that wage any way. Which brings us to the biggest omission of the article that could explain inclusive studies, the min wage is set too low to make much of a difference in the companies tracked. Firms adversely affected may go out of business within the timeline of the study.
The article and Jodi overlook the basic fact that the government should not be negotiating on the behalf of employeers and workers. The existence of a min wage removes the worker’s right to work for whatever amount of wages that they want. MIn wage is government control and is a voilation of our rights.
The Washington Post article has been pepered with agruements against the min wage, why? Less dissent exists over the min wage, Schmitt, the Post, and Jodi all don’t mind more control.

March 1, 2013 at 4:18 am
(2) Jim says:

Perhaps working for minimum wage for a year or two would help them come to agreement.

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