Rekha Basu’s recent column (“Minimum Wage Can’t Provide Basic Needs,” June 7) may tug at the heartstrings, but it fails to address the fundamental issue at hand: A minimum wage hike will harm the people it’s supposed to help.
The economics aren’t tough to understand. Businesses that hire entry-level employees who earn the minimum wage — think restaurants or grocery stores — keep a few cents in profit from each sales dollar and can’t just absorb the cost of a mandated wage hike.
Raising prices typically isn’t an option, because higher prices means fewer sales. That means employers are forced to do more with less — as in, more customer self-service and fewer job opportunities for inexperienced employees, like teens looking for their first summer job.
The evidence overwhelmingly backs up this intuition: Eighty-five percent of the credible economic research on the minimum wage from the last two decades points to job loss following a wage hike.
— Michael Saltsman, research director, Employment Policies Institute, Washington, D.C.