The Myth of Minimum Wage Killing Jobs

[Bunnahabhain]

25. The chart leaves out a very important data point

Was the minimum wage in question an effective one or not? If the old one was below equilibrium for low skilled/low productivity workers raising it would have a far different predictable impact than if the old minimum wage was already materially above equilibrium and the raise moved it even farther from equilibrium. Also, do not forget the macro economic environment will constantly influence what equilibrium is. For instance, in 2005, my organization could not get the lowest skilled positions filled at minimum wage (had to pay $1-1.50 over). In 2008 we would see dozens of applications at minimum wage for those same positions.

An interesting anecdote in this whole debate occurred in 1996/97. If you remember Card and Krueger studied the impact of New Jersey raising minimum wage by 19% in 1992. Then along came the federal raise in 96 and PA saw this raise minimum wage by $.90 while NJ only incurred a $.10 raise due to its higher state minimum. I will leave it for anyone interested enough to go read the results themselves.