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OK, I'll retract my statement about the study starting after the minimum wage was put in place, it looks like that isn't true. Furthermore, I will admit that the results have been replicated in other studies. After researching more into the subject I have come to the following conclusion: Raising Minimum Wages marginally has no effect on employment rates, only when the increase in pay can be tolerated by employers by absorbing the increased cost by increasing prices, reducing higher paid employee's wages, reducing employee turnover costs, and reducing profitability. The end result is a smattering of higher priced goods, lower paid managers, and less incentive to start a business relying on low skilled workers. Also, you can throw in some lower job turnover as well, since the cost of losing your job is greater. Of course, the next question is, when is "marginal", no longer "marginal"? Is it $15/hr, $20, $50? At some point, alternative methods to manual labor will become cheaper (such as dropping $100k upfront for a burger making robot). Once we hit that point, things will get ugly fast. |