[DonaldC]

"This do-gooder crap just results in higher unemployment. It's a terrible misuse of government power."

The same thing was said here in Colorado after the minimum wage was increased, and so far nothing has happened. Not trying to be confrontational, but I have read something like this often and am curious, what study/statistics support this claim?

[Lurker]

See post 4.

L

[vikingd00d]

>> but I have read something like this often and am curious, what study/statistics support this claim?

The USSR, North Korea, Zimbabwe... etc. Do you need more examples?

[loboinok]

http://www.cato.org/pubs/regulation/reg18n1c.html

http://www.house.gov/jec/cost-gov/regs/minimum/50years.htm

http://www.heritage.org/Research/Economy/wm676.cfm

http://www.ncpa.org/hotlines/min/pd011400f.html

[Domicile of Doom]

Forcing an employer to pay more will effect how much money he has leftover to pay his employees therefore some will be let go to make the minimum wage. The money demand changes but the money supply does not. The only way to offset this is to raise prices, which is the last thing any business wants to be forced to do, because that will drive customers to another more cheaply priced competitor. Unless of course they have all been forced to raise their wages, then businesses fail or move, leaving behind no jobs and a worse economy for the region. And yes there have been thousands of studies done to support this idea. It is basic economics.

[Jubal Harshaw]

One of the most-cited, argued about, and generally relevant studies of the effect of minimum wage increases in the US is:
"Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania" by Card, David
Krueger, Alan, American Economic Review, Volume (Year): 84 (1994), Issue (Month): 4 (September), Pages: 772-93. Abstract at:

http://ideas.repec.org/a/aea/aecrev/v84y1994i4p772-93.html

That study purports to show that minimum wage rises INCREASED employment.



A re-evaluation of the study data, and a rebuttal to the conclusions is:

"The Effect of New Jersey's Minimum Wage Increase on Fast-Food Employ- ment: A Re-Evaluation Using Payroll Records" by David Neumark and William Wascher. Abstract is here:

http://ideas.repec.org/p/nbr/nberwo/5224.html#abstract


Both articles study employment in Western NJ and across the border in Eastern PA at a time when NJ increased its minimum wage and PA did not. These areas are right across the state line from each other. In short, using subjective measurements (what employers said they were going to do when the minimum wage increased, Card and Kreuger found that an increase in the minimum wage let to an increase in employment. Using objective measurements (actual payroll numbers), Neumark and Wascher found that an increase in the minimum wage led to a decrease in employment. You pays your money and you takes your choice.