What Happens when the Minimum Wage Is Raised?

Well, among other things, you get employers looking for ways to replace human workers with automated ones. To be sure, the process of worker automation is inevitable regardless of whether there has been an increase in the minimum wage. But if you are a human being interested in keeping a job, minimum wage increases--especially sharp …

Quote of the Day

This study investigated the antipoverty efficacy of minimum wage policies.  Proponents of these policies contend that employment impacts are negligible and suggest that consumers pay for higher labor costs through imperceptible increases in goods prices.  Adopting this empirical scenario, the analysis demonstrates that an increase in the national minimum wage produces a value-added tax effect …

How Minimum Wage Hikes Hurt Workers

Behold. Key observation from Tyler Cowen: "I would be skeptical or agnostic about some of those particular estimates, but surely the general point holds, and is hardly ever mentioned by advocates of hiking the minimum wage." I don't suppose that latter fact is going to change anytime soon. Again, let's do something for the middle …

Quote of the Day

. . . we should not have a major party promoting, as a centerpiece initiative and for perceived electoral gain, a law that might put half a million vulnerable people out of work, and that during a slow labor market. --Tyler Cowen. He is quite right, of course.

The CBO’s Minimum Wage Analysis Should Surprise Precisely No One

The Congressional Budget Office has come out with an analysis of what might happen if the minimum wage is increased to $10.10. That analysis consists of the following major points: A minimum wage increase "would significantly boost income for about 16.5 million workers, raising their income by $31 billion and potentially pulling nearly 1 million …

The State of Speechmaking about the State of the Union

Last night's State of the Union address was replete with platitudes, buzzwords, lame rhetorical tricks, and the same old same old. There was nothing, new, path-breaking or consequential that came out of it. Given former White House Press Secretary Robert Gibbs's admission that President Obama "stopped trying to change Washington years ago," I suppose that none of …

How to Help the Working Poor

Like me, Greg Mankiw believes that the best way to help the working poor is through the earned income tax credit. Unlike me, Professor Mankiw uses a particularly ingenious method to make his point: . . . those who are worried about inequality look for more immediate ways to help workers with limited skills. Before turning to …

Think Raising the Minimum Wage Will Help Fight Poverty?

Then prepare to be disappointed: The decline in the real value of the minimum wage is indisputable. As shown in the chart below, the real value of the federal minimum declined sharply over the 1980s, and then further in the mid-2000s, before partly recovering with the fairly steep increases in the minimum wage in 2007-9.  …