Friday, November 7, 2014

More evidence that the minimum wage harms low skilled workers

In a new NBER working paper analyzing the minimum wage, economists David Neumark, J.M. Ian Salas, and William Wascher conclude that " the best evidence still points to job loss from minimum wages for very low-skilled workers - in particular, for teens." You can find a link to the paper as well as more analysis here.

Even if you think that the minimum wage is too low, it still makes little sense to raise it at the national level. Costs of living vary dramatically by region, state, and city. A national minimum wage set at $10/hr without adjusting for the cost of living will have a larger effect on employment in a low cost place like Easley, SC than it will in San Francisco, CA, where it may not even be binding in many industries.

I am against any minimum wage, but the best bad policy would be to let local voters decide what the minimum wage should be rather than a top down solution from Washington that unevenly harms low skilled workers in low cost areas.

No comments:

Post a Comment