July 17, 2015
Paul Krugman stated in The New York Times today that “there’s just no evidence that raising the minimum wage costs jobs, at least when the starting point is as low as it is in modern America.” To support his position, he cites studies by University of California professor David Card and Princeton University professor Alan Krueger.
Some commentators want a $12 minimum wage, as proposed by President Obama, a 66 percent increase. Others, such as the Restaurant Opportunities Centers United and New York Communities for Change, want a $15 minimum wage, a more than 100 percent increase.
If raising the minimum wage were cost-free, why stop at $10 or $15 an hour? Why not go straight to $25 an hour, the average hourly wage? That might be considered fair, because no one would have to earn less than today’s average.
The answer, of course, is because some people are displaced at any minimum wage. It is obvious to the general public that increasing the minimum wage to $25 an hour would displace workers. It is less obvious when amounts are smaller. But when the minimum wage is raised, employers hire higher-skilled people, or switch to different forms of technology such as placing orders through touch screens....
Read the full article at The Federalist: Sorry, Paul Krugman: The Minimum Wage Won’t Miraculously Cure Poverty