Friday, July 29, 2016

Do Democrats really believe that increasing the minimum wage is going to boost employment in North Philly?

http://www.wsj.com/articles/the-fight-for-15-will-hit-north-philly-hard-1469574439 says that increasing the minimum wage will increase unemployment among and crime committed by entry level workers. The CBO study it cites states that the minimum wage may have contributed to the increase in joblessness and incarceration rates among 18034 year-old-males. The CBO study does a nice job showing how the demand for the lowest-skilled male workers has decreased. Simple economics tells me that the consequence of the reduction is demand is a reduction in the equilibrium wage and, if wages cannot fall because of legal restrictions, and a reduction in employment.

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