August 12, 2015

Why Minimum Wage Increases Will Come Back To Haunt The Left In One Cartoon

From Powerline:
Interesting news on the minimum wage front this weekend. First, the Brookings Institution, perhaps better known as the Hillary Clinton administration-in-waiting, put out a note by an economist who served in the last Clinton administration that is highly critical of the proposal for a national $15-an-hour minimum wage:

A $15-hour minimum wage could harm America’s poorest workers
Many economists worry minimum wage increases tend to reduce employment, hurting young and less-educated workers the most. And they have analyzed the effects of state and federal increases in the U.S. and other countries in hundreds of statistical studies. Some credible studies find moderate negative effects while others find none; our best guess is that moderate minimum wage increases will lead to modest job losses. In a Congressional Budget Office report last year, policy analysts predicted that Obama’s proposal to raise the federal minimum wage to $10 an hour would raise wages for 16 to 24 million people while eliminating about half a million jobs – a reasonable tradeoff worth embracing, in my view.
But I have much more serious worries about a $15 an hour minimum wage, which constitutes a wage increase of 50% to 100% in most places (even after adjusting for inflation). In cities like Seattle, with a relatively more educated workforce and dynamic labor market, it might be a gamble worth taking. But in other cities, such as L.A. and Washington, D.C. – with their large populations of less-educated workers, including unskilled immigrants – such increases are extremely risky.

In job markets where young or less-educated workers already have difficulty finding jobs and gaining important work experience, such mandates will likely make it much harder. . .
Trying to accomplish this [raising wages] by simply making 15 the new 10, in terms of minimum wage increases, could potentially generate more harm than good
I’m sure Hillary and Bernie will pay close attention to this. …

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