Will a minimum wage increase induce an apocalyptic conflagration of small businesses and low wage employment? Here’s one prediction:
This is not the time to force businesses to raise prices by laying-off employees in order to stay in business.
What good is raising the minimum wage if prices go up? What good is raising the minimum wage if there are no jobs available?
Businesses will be forced to raise prices in order to absorb a 26% pay increase. Restaurants will be especially hard hit.
Wages in right to work states are lower than those others. After controlling for various factors, the gap remains.
On progress in implementing the minimum wage.
A growing number of observers are starting to conclude that we’re never going to see the rebound in growth rates that many people had anticipated as the U.S. recovers from the Great Recession. Here I comment on a new paper in which Northwestern Professor Robert Gordon explains the basis for his pessimism.
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How tight is the labor market? A recent article summarizes the argument that wage pressures are building. From K. Madigan in WSJ Real Time Economics:
Is there a linear relationship over time between the share of workers affected by the minimum wage and the ratio of the minimum wage and average compensation?
In Wisconsin, the main beneficiaries of a minimum wage increase to $10.10 would be individuals aged 20-29 years, females, and (proportionately), blacks and hispanics. Hence, opposition to a minimum wage increase implies a worse outcome for those groups in the aggregate relative to an elevated-minimum-wage scenario.
The Wisconsin Manufacturers and Commerce group has a recent piece, written by Scott Manley (VP), highlighting negative impacts of a minimum wage increase. I have attempted to track down the numbers cited. It has been an illuminating experience.
Why bother with econometrics when revealed truth will do?
With updates on the econometric debates on effects, and efficacy in targeting low income groups (3/30)
Minimal employment number impacts and minimal inflation impacts. But I am sure the resistance to having a greater share of income going to labor will continue.