Vat Is Das? Minimum Wage, Unemployment and Investor-Driven Housing Recovery

I am almost afraid to ask students (or my in-laws) what they think of President Obama’s State of the Union plea for raising the minimum wage from $7.25 to $9.00. I will ask my students this week, but not my in-laws (I already know their …

I am almost afraid to ask students (or my in-laws) what they think of President Obama’s State of the Union plea for raising the minimum wage from $7.25 to $9.00. I will ask my students this week, but not my in-laws (I already know their answer – YES!). The Wall Street Journal has an excellent article on the minimum wage and its impact on employment. While raising the minimum wage sounds “fair,” it is really grossly unfair to low-skilled workers.

University of California at Irvine economist David Neumark has looked at more than 100 major academic studies on the minimum wage, and he says the White House claim of de minimis job losses “grossly misstates the weight of the evidence.” About 85% of the studies “find a negative employment effect on low-skilled workers.”

So, raising the minimum wage could actually INCREASE unemployment or decrease partial employment. Even Mort Zuckerman admits that we already have an employment nightmare on our hands (which I call the unemployment serpent)…

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