Smiting the Minimum Wage Myth

From “The Nation Magazine” - Raising the Minimum Wage Will Benefit Economy 
by Barbara Koeppel February 10, 2014  
http://www.thenation.com/article/178285/rand-paul-gets-math-wrong-minimum-wage#

The myth – “Raising the minimum wage will kill jobs”

Economists do not agree that “raising the minimum wage will kill jobs”, as discussed in the referenced article.  They conclude that past hikes have had “little or no negative effect on the employment of minimum-wage workers.”  They go further to state that raising the minimum will provide a positive boost to the economy. 

In fact, the Economic Policy Institute (EPI) president, Lawrence Mishel says that, 
“Across the phase-in period, GDP would grow by about $22 billion, resulting in the creation of roughly 85,000 net new jobs” and the hike would directly affect 17 million workers and another 11 million indirectly.  

Minimum wage hikes go directly to those that need it the most and they will spend it to meet basic needs.  This stimulates the economy and creates more jobs and profits.

“Mishel quotes a recent study by the Center for Economic and Policy Research that shows that over the past few decades, minimum wage hikes have not caused employers to lay off workers because other factors kick in that benefit bosses—such as retaining their staff longer, which means lower turnover costs for training and learning time. He adds that while businesses may pass on some of the cost of increased wages to their customers, they do this only slightly—since they must stay competitive.”

Debunking a favorite right-wing myth that mainly teens work at the minimum, Mishel notes that the people who would benefit most from a minimum wage increase are actually adults (87.5 percent), of whom more than half are women who work over twenty hours a week to make ends meet. Moreover, those benefiting from higher wages contribute half of their family’s income.

And speaking of teens, in the early 1990s, when New Jersey introduced a minimum wage bill, economists David Card and Alan Krueger surveyed fast-food restaurants in that state, along with those in Pennsylvania—which did not—and found that when comparing the two, there was “no indication” that the rise had reduced the number of those jobs in New Jersey.”