$1 Increase In Minimum Wage Would Cost Thousands Of Jobs

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minimum wage

A $1 increase in the federal minimum wage could cost the national economy tens of thousands of jobs, according to a new study by economists Grace Lordan of the London School of Economics and David Neumark of the University of California, Irvine.

The economists sourced through 35 years of data and found that increasing the minimum wage incentivizes firms to automate low-skilled labor–the very individuals who would stand to benefit the most from even marginal increases in compensation. The pair focused on workers with only a high school degree, as this group is largely the target of minimum wage laws.

Lordan and Neumark used data from 1980-2015, which only shows an increase of the minimum wage from $6.77 to $7.77. The findings could have some insights into the current labor market, especially given the recent “Fight for $15” campaigns going on around the U.S.

Seattle notably pushed for a $15-an-hour minimum wage in 2012 and now some 18 percent of the U.S. workforce lives in a city or state that has approved such a wage increase. If the economist’s findings are accurate and a $1 increase really does cause tens of thousands of low-skilled workers to lose their jobs to automation, then raising the minimum wage to $15 could have some rather drastic consequences for the American labor force.

Not all economists agree with Lordan and Neumark. Economists Jonathan Meer and Jeremy West released a report in which they found that raising the minimum wage does not lead to a reduction in the level of unemployment, but rather leads to a slower rate of job creation. Meer and West did find younger and less educated workers suffer most from the slow rate of job creation.

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  • Gil G

    You can’t run an economy without serfs.

  • SP_88

    These idiots are fighting for their own joblessness, and they don’t even know it. Even the people who didn’t agree with the loss of jobs finding did agree with the slowing of job creation. Although it’s impossible for a sudden jump to a $15 an hour minimum wage not to cause a loss of jobs.
    But either way these same people will not be working at all, and thus they will end up earning the real minimum wage, which is zero. Don’t say you weren’t warned.
    I hope it was worth it.

  • Frank

    Did any of these “academics” bother to go to Seattle and actually conduct research among businesses and workers that have been affected by the Socialist-inspired “working wage” that has been implemented there? I doubt it. If they had, they would find that businesses have moved OUT of Seattle and taken the jobs with them.
    The Law of Unintended Consequences can be a real bitch, but Liberals just keep going back for more abuse – and we all pay for their boundless ignorance.

    • Rey d’Tutto

      Those that remained reduced hours, eliminated perks, and started charging for previous freebies, like parking or food & soda. Part time employees didn’t need medical or dental, nor 401k’s.

  • anonymous4u4me

    The very people and things they fight against are the ones that put them up to this, and they are to stupid to see it, Eventually they let the crowd win, only later to say we are losing money, and now have to turn to kiosk and or robots to survive. The goal to you sheep is to make as many as possible jobless so you become dependent on the very evil that drives this govt. then you will require it for food, water, medicine and more and only partake if you except the mark. But hey keep thinking your helping yourselves and others and marching to your demise. My prediction ,shortly, about 75% of the nation will be jobless and homeless. Seems like allot of people didn’t care or don’t care about others losing their jobs or careers, for they think it won’t or can’t happen to me, so hey I will bank with a machine. or I will use a speedy checkout with a human, or I will take my cart back etc. etc. but like the snowball effect, it will catch up to you and your job or career and then you will stand in line to partake of the chip, mark. or be culled. If I were you, I would take a bullet to the heart or brain and not even get in the line, but most will not fight as they are sheep, have no God or are lazy and selfish.

  • roger

    This is why there should be no messing with minimum pay for workers….

    26 USC Section 3401

    Definitions.

    (c) Employee. For purposes of this chapter, the term “employee” includes an
    officer, employee or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia,
    or any agency or instrumentality of any one or more of the foregoing. The term
    “employee” also includes an officer of a corporation.

    Here is a classic example of how it is easy to be
    misled by the Code. Though it first appears that the definition of
    “wages” includes the earnings of every person, a closer look shows
    that the actual legal definition of the
    term employee does not include persons
    working outside of the U.S. government. (Certain
    corporations that were originally set up by the federal government and that are
    run by the federal government have appointed corporate officers, such officers
    are included in this legislation. But
    not the officers of any private corporations incorporated under the laws of one
    of the fifty states).

    Did you notice that under the law only
    individuals who work for the Federal government are “employees”.
    That of course means that the only
    “employer” addressed by the laws in Chapter 24 of Title 26 is the
    Federal government. This is because
    under the Constitution, the Federal government does not possess the territorial
    jurisdiction to dictate, alter, or attach to work agreements under private contracts. Under the law, no one else can be an
    “employer”, by mandate, except the federal government, and only those
    people working for the Federal government can be “employees”, have
    “employment”, and possess “wages”.