On a basic level, raising the minimum wage appears to be a sympathetic policy for low-income wage earners.
The consensus among economists has always been that a price floor on "Low-skilled labor" leads to unemployment "Among the very people minimum wage legislation allegedly helps." Surely those who retain their employment will reap the higher hourly pay but not without consequence to the rest of the "Low-skilled" labor market.
The manager makes well over the current minimum wage, but six of the nine other employees make the current minimum wage.
Staff making a wage higher than the old minimum wage but lower than the new rate will also request that their wages be increased to distinguish them from their peers and to compensate them for their skills.
In an EconTalk podcast with Russ Roberts, Jacob Vigdor shared his main findings about Seattle's minimum wage increase: "First of all, the minimum wage did appear to raise wages. That's what we expected to see. But when we looked at employment, we actually saw a reduction." Vigdor further mentions that hours worked decreased as wages went up.
The biggest loss "In terms of much lower pay would be amongst the workers who hadn't even entered the labor market yet when the minimum wage started to increase, because they were finding it harder to find any work at all."
The key takeaway from Vigdor's study was the minimum wage's effect on workers who had yet to enter the labor market.
https://mises.org/wire/why-minimum-wage-so-bad-young-workers
The consensus among economists has always been that a price floor on "Low-skilled labor" leads to unemployment "Among the very people minimum wage legislation allegedly helps." Surely those who retain their employment will reap the higher hourly pay but not without consequence to the rest of the "Low-skilled" labor market.
The manager makes well over the current minimum wage, but six of the nine other employees make the current minimum wage.
Staff making a wage higher than the old minimum wage but lower than the new rate will also request that their wages be increased to distinguish them from their peers and to compensate them for their skills.
In an EconTalk podcast with Russ Roberts, Jacob Vigdor shared his main findings about Seattle's minimum wage increase: "First of all, the minimum wage did appear to raise wages. That's what we expected to see. But when we looked at employment, we actually saw a reduction." Vigdor further mentions that hours worked decreased as wages went up.
The biggest loss "In terms of much lower pay would be amongst the workers who hadn't even entered the labor market yet when the minimum wage started to increase, because they were finding it harder to find any work at all."
The key takeaway from Vigdor's study was the minimum wage's effect on workers who had yet to enter the labor market.
https://mises.org/wire/why-minimum-wage-so-bad-young-workers
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