Saturday, December 14, 2013

A positive review of "modest" increases in the minimum wage

This opinion from the NYT supports Obama's proposal to increase the minimum wage. It states that the evidence shows that the impact of modest increases in the minimum wage is insignificant and describes recent studies that provide a series of possible explanations. 

I wish that the effect was not limited to modest increases in the minimum wage. I wonder if, given the variations in employment driven by technological change, the business cycle, and demographics, statistical tests may not be able to identify the small change in employment that a modest increase in the minimum wage might cause. 

The evidence claiming that the minimum wage reduces employment opportunities suffers flaws as well. Opponents of minimum wage legislation often cite the high rates of unemployment of young people and African-Americans and the increase in these rates relative to our history before minimum wages. Perhaps other factors explain these rates and their increase.

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