
Minimum wage is NOT Job loss - known
http://ineteconomics.org/ideas-papers/blog/minimum-wages-job-loss
======
UK-AL
Minimum wage has got to have impact on jobs at a certain point.

If you set minimum wage at 50 USD an hour, there will be job losses.

The question is, what is the point where you start encountering job losses?

~~~
jhugg
And some people are pointing to the magnitude of the recent changes in some
places in the US, $8->$15 per hour, as an experiment that perhaps hasn’t been
tried before. It’s possible this will be different.

But anyone who claims that minimum wage hikes will affect jobs, is making a
hypothesis based on some theory that is far from settled, not a predition
based on evidence.

------
nextweek2
Minimum wage argument is a little fruitless, in my view. It's just moving the
yard stick with no real gain.

If you said on 1st of Jan the minimum wage was $50, businesses would raise
product prices to cover the overhead. That leads to inflation. Suddenly a Big
Mac jumps from $2.25 to $14.51. Nobody is better off because the ratio has
stayed the same.

Of course you cannot peg the price of the Big Mac because you end up in the
same situation as Venezuela.

~~~
dragonwriter
We have actual experience of minimum wage increases, and considerable evidence
that they do not, in fact, keep the ratio the same. Yes, they do drive some
inflation, so the benefit isn't as great as one would expect considering price
levels before the policy, but inflation due to the change in minimum wage does
not eat up the benefit at the level of the minimum wage.

Why this should be the case is fairly easy to understand; Minimum wage
increases neither create new money nor increase the cost of all inputs (or
even all labor) by the ratio between the new minimum wage and the old one, so
what they do effectively is compress the gap between the incomes of those
making the minimum wage and people higher on the income distribution. As such,
the amount of money chasing consumer goods increases (because, while the money
supply doesn't increase, more money goes to those with a higher propensity to
consume) by less, in total, than the ratio of the new to old wage. But those
making minimum wage both before and after have their _personal_ income
increase by the full ratio.

------
payne92
The article and report qualify "modest" increases in minimum wage. If you are
talking about raising the minimum wage to $15, that's not "modest".

Also, the report talks about job growth after minimum wage increases.
Causation question: do minimum wage increases correlate at all with periods of
economic prosperity?

