Minimum wage, maximum noise | Bleader

Thursday, December 14, 2006

Minimum wage, maximum noise

Posted By on 12.14.06 at 07:01 AM

If you were working yesterday when All Things Considered featured Florida's minimum-wage hike of two years ago, check out the transcript and audio links at National Public Radio. Reporter Frank Langfitt replayed the campaign ads in which opponents of the measure predicted economic disaster and proponents predicted great things, then went looking for evidence. Businesses that slashed jobs? Employees whose lives were greatly improved? He found neither.

Bottom line:  both sides oversold the measure. Modest increases in the minimum wage, especially in tight labor markets, have such small effects it's hard to sort the noise from the signal. On the other hand, they don't do much to reduce inequality or poverty, because so many minimum-wage earners are teens who aren't supporting families and often aren't poor.

A recent panel of economists from both sides of the issue at the American Enterprise Institute came, at greater length and with a lot more detail, to a roughly similar conclusion. (The video's an hour and a half, so normal people will prefer the NPR version.)

 

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