Cato Institute economist William Poole here discusses the proposal to increase the minimum wage, not surprisingly being pushed by the statists at the New York Times and some “progressive” economists.
Zealots for government intervention in the market economy claim that raising the cost of hiring workers won’t lead to many of those workers losing their jobs. They point to studies showing that in response to earlier increases, job losses were small. Poole explains why that reasoning is mistaken — the attrition takes place slowly and is mostly not captured in the data collected for the study.
A further point that Poole might have made is that no study can take account of entry-level jobs that never come into existence at all because the cost of hiring workers is too high. That’s a big reason why teenage unemployment used to be low but is now much higher.
