Minimum Wage Equals Maximum Unemployment

|
4
Minimum Wage Equals Maximum Unemployment

Striking fast-food workers are joined by supporters, union members and activists at a rally in New York City's Foley Square to demand an increase in the minimum wage to $15 an hour.

© Andrew Lichtenstein/Corbis

Any issue dealing with money is bound to be deeply divisive and highly politicized, and minimum wage increases are no exception. The arguments are varied and complex, but essentially one side contends that a higher minimum wage hurts businesses, which drives down job availability, which hurts the poor. The other side responds that there's little evidence for this claim, and that the 3.6 million Americans working at or below minimum wage, which some argue is not a living wage, would benefit from such an increase. They argue that, adjusted for inflation, the federal minimum wage ($7.25 per hour in December 2013) has tobogganed downhill for the past 40 years [sources: Bureau of Labor Statistics; Irwin].

As George Bernard Shaw reportedly quipped, "If all the economists were laid end to end, they'd never reach a conclusion," and the minimum-wage debate seems to bear that out [source: Ridgers. For every analyst who says minimum wage increases drive jobs away there is another who argues against such a correlation [sources: Baskaya and Rubinstein; Card and Krueger].

In the end, both sides share a fundamental problem, namely, the abundance of anecdotal evidence many of their talking heads rely on for support. Secondhand stories and cherry-picked data make for weak tea in any party, even when presented in pretty bar charts.

|