“Meanwhile, studies continue to appear emphasizing the hazards of minimum wage laws. I find Neumark’s recent paper with Olena Nizalova especially unsettling. They find evidence that minimum wage laws discourage teenagers and young adults from acquiring the human capital they need in order to get better jobs and higher wages later in life. That is, minimum wage laws work to ensure that those who already have the fewest opportunities to develop their capacities, have even fewer still. They say this baleful effect is strongest for young blacks”. –Will Wilkinson, discussing the minimum wage at Cato
Jul11th2006
One can learn much about a proposal by looking into who is the strongest advocate.
Unions have much to gain from minimum wage laws, NOT because of their members wages (already well above the MW floor), but because it tends to eliminate cheaper competition from nonunion workers.
Wouldn’t raising minimum wage be a great benefit to business? Think about it… raise it to $20 an hour so a business who could traditionally afford 3 minimum wage employees can only afford one. Businesses will be forced to adapt and learn to be more effecient or go out of business. In turn, there are less jobs so that one job that is available is more lucrative and thus requires more competition.