Democrats’ plan to hike the minimum wage would cost American jobs, a new review of decades of studies finds.
The analysis, published Monday by the National Bureau of Economic Research, combed through academic literature on the minimum wage and determined that nearly 80 percent of studies conducted since 1992 have found that an increased minimum wage leads to a decrease in the level of employment.
The effect, study authors David Neumark of U.C Irvine and Peter Shirley of the West Virginia state legislature find, is most pronounced for teens and young adults, particularly for the less-educated—meaning that these groups are most likely to be pushed out of the labor market by a hike in the minimum wage.
The new study comes as congressional Democrats reintroduce legislation to raise the federal minimum wage to $15 an hour and as President Joe Biden pushes for the same hike as part of his proposed $1.9 trillion COVID-19 stimulus plan. Neumark and Shirley’s findings serve as evidence that these pushes could cost American jobs as the unemployment rate remains elevated thanks to the coronavirus recession.
Neumark and Shirley observe that the debate around the minimum wage is highly fraught, with expert economists often reaching different conclusions based on the same data. Surveying recent summaries of the literature, they find that researchers have simultaneously concluded that increasing the minimum wage cuts jobs, that it doesn’t cut jobs, and that the evidence is too equivocal to say either way.- READ MORE
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