[jfengel]

You don't actually know that. It's too simple a model. Real world data on minimum wages do not bear it out.

There are more variables than the graphs you get in the first two weeks of Econ 101. If you make it to the end of the semester, or even to the midterm, you'll know that the simple predictions you got on the first quiz were false.

[mchusma]

I think it does bear that out in general, although it is slightly more complicated. What seems to happen 1. Low-wage workers, as a collective group, experience an increase in earnings (Dube & Zipperer, 2024). 2. Total job losses do take place, but are minor and teens/part-time/new entrants workers lose more often (Belman & Wolfson, 2014; Redmond & McGuinness, 2024). 3. Lost hours & increased prices - businesses primarily absorb the cost by slightly reducing weekly hours worked & increasing prices for consumers (Redmond & McGuinness, 2024)

I would agree that modest minimum wage increases are far from the worst thing the government does, compared to other government interventions.