A new report suggests that recently instituted minimum wage hikes at the state level has cost as many as 200,000 jobs. This contradicts the claim that the minimum wage is great for the economy.
The Federal Reserve Bank of San Francisco released its report Monday entitled “The Effects of Minimum Wages on Employment.” It explained that the newly enacted minimum wage increases at the state and federal levels may have cost the economy anywhere between 100,000 and 200,000 jobs. Economist David Neumark, who authored the analysis, multiplied the minimum wage hikes by the number of job losses associated with higher minimum wages.
Neumark’s findings adds to the growing debate on the presidential campaign trail in which Democrats are in favor of raising the minimum wage to $15, while some Republican candidates reject the idea.
Although the White House often refers to a plethora of recent studies that say higher minimum wages have no effect on employment levels, Neumark notes that these studies usually cited depend on comparisons between neighboring states that aren’t similar. And this is an important distinction.
“The overall body of recent evidence suggests that the most credible conclusion is a higher minimum wage results in some job loss for the least-skilled workers — with possibly larger adverse effects than earlier research suggested,” wrote Neumark.
For years, Austrian economists have explained that the minimum wage is compulsory unemployment. Here is what economist Murray Rothbard opines on the minimum wage:
“Hence, laws that prohibit employment at any wage that is relevant to the market (a minimum wage of 10 cents an hour would have little or no impact) must result in outlawing employment and hence causing unemployment.”
The minimum wage hurts those who are the least skilled, least educated and least experienced and often hurt the poor, youth and immigrants (SEE: 8 key arguments against raising the minimum wage to $15 per hour). Meanwhile, the only ones who really benefit from the minimum wage are billion-dollar corporations, unions and politicians who pretend they care for the impecunious.
Some economists and politicians don’t even care that the minimum wage kills jobs (SEE: Robert Reich: It doesn’t matter if a $15 minimum wage kills jobs). They just care about their image and the notion that they are looking after everyone’s well-being. Phooey! These same economists have often criticized the minimum wage, but for whatever reason they changed their minds later on (SEE: Paul Krugman on the minimum wage: 1998 vs. 2005).
It’s time to kill the minimum wage.
–AM
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