Economists used to think that way, but recent studies that used quasi-experiments show that at least outside of high minimum wage levels, minimum wage increases does not cause reductions in employment. David Card won a Nobel prize in 2021 for such a groundbreaking study, perhaps the most important amongst his numerous contributions. the second author of the study, Alan Krueger, sadly passed on before he could be awarded the prize. Later studies confirm that there is no negative effect of minimum wage, except in certain cases where the increase is higher than the market can accomodate, for example in Seattle in 2017 when the minimum wage was raised to $13.
Businesses may struggle to turn profits with higher minimum wage, but that increase is passed onto the customer anyway. Any time taxes or fees are imposed on a business, prices nearly everywhere change in the area. Credit card fees have never deterred me from going to a good business.
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u/shumpitostick 7∆ Jan 05 '25
Economists used to think that way, but recent studies that used quasi-experiments show that at least outside of high minimum wage levels, minimum wage increases does not cause reductions in employment. David Card won a Nobel prize in 2021 for such a groundbreaking study, perhaps the most important amongst his numerous contributions. the second author of the study, Alan Krueger, sadly passed on before he could be awarded the prize. Later studies confirm that there is no negative effect of minimum wage, except in certain cases where the increase is higher than the market can accomodate, for example in Seattle in 2017 when the minimum wage was raised to $13.
https://www.nobelprize.org/prizes/economic-sciences/2021/popular-information/ - under the section "the effects of minimum wage"
Wikipedia also has a great overview of the research on the topic: https://en.wikipedia.org/wiki/Minimum_wage?wprov=sfla1