Does the minimum wage reduce employment?

by Russ Roberts on April 4, 2013

in Work

In the Intelligence Squared debate I participated in last night on the minimum wage, Jared Bernstein argued (and argues again here in his follow-up at the Huffington Post), the impact of the minimum wage on employment is an empirical question. Based on his review of the literature, Bernstein finds that the impact is zero:

The whole point of the new research — and I’m talking about work that finds both positive and negative impacts — is that those impacts hover around zero, which should lead objective observers to be highly skeptical that phasing out the minimum wage would lead to large employment gains.

Could be. Large is a relative term. Certainly, the lower the minimum wage, the smaller the effect and the harder it will be to observe its impact in the data. Many minimum wage studies focus on teenagers or younger workers or workers without a high school diploma. But even among these workers, most of them earn much more than the minimum wage. So the minimum wage is not binding. But that only means the effects are small and hard to identify empirically, not that they are zero……To Read More….  

My Take – As you read this article and the one that follows you will see that not everyone agrees that a government mandated minimum wage is harmful….or at the very least is not measureable in any firm way.  That really isn’t the point though is it?  It isn’t the government’s job to determine this stuff.  That has been the slippery slope from the beginning.  Once they can impose any rule determining a company’s policies then there is no end to them.  The rule making by bureaucrats and elected officials becomes a plague on humanity.