The minimum wage: does it hurt workers?

Joe Biden has pledged to raise America's national minimum wage to $15 an hour. Economists traditionally believed that minimum wages actually hurt workers, but recent research has led to a rethink.

[chris]

I worked minimum wage jobs in Seattle from about 2012-2018, and in my experience they don't cut your hours because of the wage--they cut your hours so they can keep you part time and not pay for health insurance.

[minchoi]

No matter how high or low we set our minimum wage, our wage should at least keep up with inflation

[hidalgov]

Federal minimum wage is an impractical concept, 15 dollars an hour isn't the same in New York City compared to someone living in rural Alabama. The minimum wage needs to be adjusted to the cost of living of the area.

[cninusa]

Economics: when price goes up, people want less of it.
Apple inc: 🤣🤣🤣 You got me.

[CalebFrezza]

Instead of increasing the minimum wage, we need to work towards decreasing the cost of living.

[miguelmx]

“Does the minimum wage hurt workers?”
Video: WE DON'T KNOW YET.

[jonathanrajan]

Summary:
I) Historical perspective: Economists feared that raising minimum wage would lead to job losses. Their belief was premised on the fundamental economic theory that increase in price (i.e. increase in wages) would lead to reduction in demand (i.e. reduced employment uptake/lower working hours/job loss).

II) Empirical verification: Krueger and Card, in their cross-State comparison between Pennsylvania and New Jersey found that the rise in minimum wage in New Jersey did not slow down its equivalent employment rate vis-à-vis Pennsylvania. So done debate? No!

III) Contradictory empirical evidence: There are multiple research papers that have arrived at contradictory conclusions. Some based on aggregated data have concluded that minimum wage meant loss of working hours, while others found that less working hours at one place did not mean that people were not taking up other jobs elsewhere.

ISOLATING THE IMPACT OF HIKE IN MINIMUM WAGE IS DIFFICULT.

IV) Suggestions: The methodology of enhancing minimum wage has to be empirically backed through research + be nuanced (different states may require different approaches + different sectors of the economy may require different minimum wages).

TAKE AWAY: Be more empirical, less theoretical.

[avinashtyagi]

The problem is economists ignore half the equation, they focus only on the demand and supply of labor, and forget that people with higher wages spend more

[BenjaminPersson]

I have a hard time understanding state/federal set minimum wage. With strong unions in Sweden we have negotiable minimum wages set in individual job sektors/markets. I am very confident that this makes sure that wages are set to what the market, for that particular sector, can agree on and that salaries increase at a rate that that market can support. By having a state set minimum wage it is too easy for employers to just enforce minimum wage without any debate, leading to higher than appropriate salaries for some jobs and too low for other. I understand that this system right now would be devastating for some countries with low to no unionzsation. It worries me though, that the EU is pushing for a EU set minimum wage since that would break down the systems, like Sweden's, that today function for both the employer and the employee, taking into account the market. Union-driven salaries would, in my opinion, make sure that wages stay closer to the market. Unionzsation doesn't break a functioning market as long as it is regulated.

[armanke]

I just glad it comes back to policy debates, not petty things like twitwars and namecalling (though we still reeling with those) they're useless and unproductive, can we agree on that?

[Spicy]

In Alberta Canada, they raised it to 15 CAD/hour. And our part timers lost hours and when some people quit, they wouldn't replace them

[jlrob]

Keep minimum wage close to inflation otherwise a large majority and their families will be priced out of the market. Australia has a $19.84 minimum wage (for adults) and we are doing just fine

[PeterBuvik]

Fun fact Norway doesnt have a minimum wage we have a Tripartite system which means that both corporations and workers have unions

[NickyNick]

It’s almost as if the government could guarantee its citizens healthcare that wasn’t tied to our employers (because that shouldn’t matter in the first place), allowing our employers the ability to pay us more...

[jamesp]

Joe Biden on $15 min: "I'M GONNA GET IT DONE". Let us see if that promise is anything more than an election year gimmick.

[kunikloy]

Minimum wage or not, a person doing a full-time job should be able to feed him/herself at the place they live in. Insurance, housing, food, commuting, reasonable amount of entertainment.

[thaigerstyle]

The folks who complain about what happened to "Made in America" and the same people who care more about profits than Americans.

[redbambibeatz]

“Some economists still fear a federal minimum wage is too high to handle, and will lead to job losses” hmm whaddya think the economists at the Economist think

[joeyboedeker]

Take care of your people, your people will take care of you.

[stefm.]

As someone who struggled through apprenticeships to get into the market I'd like to ask if minimum wage has an impact on the increased difficulty of entering the labour market? It's possible that, even though minimum wage might not increase unemployment on pepper, it incentivises employers to get labour through schemes that allow them not to pay minimum wage and are actually worse than regular employment. Zero hour contracts could also be another byproduct of minimum wage