The key thing you need to know about a minimum wage hike is that it will kill jobs.
About 80 percent of economists surveyed recognize this job-killing reality, points out former chair of the White House Council of Economic Advisers and current Harvard economics department chairman Greg Mankiw in his popular textbook, Principles of Economics.
Moreover, 85 percent of econometric studies demonstrate this job-killing fact. U.S. News & World Report explains, “Proponents of a higher minimum wage point to a handful of studies that find no jobs effect to make their case. And it’s true, these studies do exist — but they’re in the extreme minority. Two economists from the Federal Reserve Board and the University of California-Irvine took the time to read all of the most credible research on the minimum wage from the past 20 years, and found an overwhelming 85 percent of it pointed to a decline in employment.”
James Buchanan, 1986 Nobel laureate in economics, famously wrote in The Wall Street Journal on April 25, 1996:
The inverse relationship between quantity demanded and price is the core proposition in economic science, which embodies the presupposition that human choice behavior is sufficiently rational to allow predictions to be made. Just as no physicist would claim that “water runs uphill,” no self-respecting economist would claim that increases in the minimum wage increase employment. Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimal scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests. Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores.
When legislating, U.S. Senators follow the Congressional Budget Office’s “score” of the cost of bills. In the middle of CBO’s range of estimates for a bill that raises the minimum wage from the current $7.25 per hour to $10.10 per hour is a loss of 500,000 jobs.
While some on the left argue that the wealth transfer from the pockets of these half million workers who would be unemployed is worth it, polling shows that the vast majority of the American people do not agree the job loss is worth it. The Hill writes, “Even worse from Big Labor’s standpoint, recent polling has shown support for a minimum wage hike implodes once respondents consider job loss. A recent Bloomberg News National Poll found 57 percent believe it is “unacceptable” to risk 500,000 jobs…”
Senators voting for this minimum wage hike will have a hard time explaining their focus on job creation.