minimum wage is a bad idea. The job market, according to elementary economics, is like any other market. It works best if wages are set by supply and demand, not by any other factor, like government rules. Just as the government doesn’t set a minimum price for shirts or avocados, so they should not be telling employers the lowest amount they can pay workers. Standard economic theory says a government-enforced minimum wage risks the loss of jobs, as there could be some employers only willing to hire workers at a wage below the minimum, and some workers without jobs who would take one that pays below that minimum. By mandating a minimum wage, the government is harming both employers and workers, and hurting the economy’s productivity to boot. Yet when a recent study found that a sharp rise in the minimum wage in Seattle led to job losses and fewer hours for low-wage workers—exactly what supply and demand theory would predict—it led to a vociferous debate within the economics profession. The primary complaints of those who found fault with the research was that certain types of workers who may have benefitted from the wage rise were excluded from the analysis. The minimum wage has become a battleground for economists. Thomas Leonard of Princeton writes in his excellent history (pdf) of the minimum wage, The Very Idea of Applying Economics: The Modern Minimum-Wage Controversy and Its Antecedents, that the amount of energy that goes into minimum-wage arguments vastly outstrips its importance as a policy matter. Issues like the design of health insurance, tax policy, and entitlement reform are more important policy issues, he says, but don’t inspire nearly the level of rancor—less than 2% of American workers received wages at or below the federal minimum in 2016.
the federal minimum wage will also stimulate consumer spending, help businesses' bottom lines, and grow the economy. A modest increase would improve worker productivity, and reduce employee turnover and absenteeism. It would also boost the overall economy by generating increased consumer demand.Wages in the sector are low enough that increases to $10 or $12 per hour may trigger wage increases for the lowest paid employees. ... The potential consequences of higher child‐care costs will disproportionately affect lower income families, the very families minimum wage laws are supposed to help.
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