New Research Debunks Claim That A $15 Minimum Wage Would Not Reduce Employment

A new paper published by the National Bureau of Economic Research finds a “clear preponderance” of evidence that minimum wage laws reduce employment.

resident Joe Biden is pushing a federal $15 minimum wage in his sweeping $1.9 trillion COVID-19 relief package, and the policy is only gaining steam in progressive circles. But newly released research undercuts the main argument progressive economists make in favor of minimum wage increases.

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new paper published by the National Bureau of Economic Research surveys the body of economic research on minimum wage increases and rebuts the notion that empirical data show no impact of increases in minimum wage hikes. The authors find that of all the available research on the subject they reviewed, there is a “clear preponderance” of findings that show a job-killing impact. The documentation of job losses is even more pronounced for teenagers, young adults, and the less-educated.

“[The] body of evidence and its conclusions point strongly toward negative effects of minimum wages on employment of less-skilled workers, especially for the types of studies that would be expected to reveal these negative employment effects most clearly,” economists David Neumark and Peter Shirley write

This research is a direct rebuttal of one of the most popular pro-minimum-wage-hike arguments offered by progressive economists. They rarely engage directly with the ironclad theory of supply and demand in competitive labor markets that proves the minimum wage causes unemployment just like any other price floor creates surplus.1 

Many advocates simply pivot to empiricism and handwave about “the data” not showing any impact.

“There’s just no evidence that raising the minimum wage costs jobs, at least when the starting point is as low as it is in modern America,” economist turned left-wing New York Times  columnist Paul Krugman has argued. (Reversing his own former position). Similarly, economist and former Federal Reserve Chair Janet Yellen recently reversed her prior position during a confirmation hearing for her political position as the Biden administration’s Treasury Secretary. Now, she argues that the research suggests a “very minimal” impact on employment from minimum wage increases. 

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Brad Polumbo is a libertarian-conservative journalist and Opinion Editor at the Foundation for Economic Education.

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