Wage Increase Not A Help For Economy

Posted on January 28, 2011

Advocates of a minimum wage increase in Maryland claim it will help stimulate the state economy (“Minimum Wage Of $10 Per Hour Pitched,” The Dispatch, Jan. 21). They may wish that were the case, but the economic evidence shows otherwise.

New research from Dr. Joseph Sabia, a labor economist at West Point, demonstrates that past increases in the minimum wage have had no positive effect on overall economic growth — and can even have a negative effect on the output of certain industries that employ less-experienced employees.

That’s not the only unintended consequence of a wage hike. The research also finds that each 10 percent increase in the minimum wage decreases teen employment by 3.6 percent.

Less business output and lost jobs – hardly the way to help workers and stimulate Maryland’s economy.

Michael Saltsman
Washington, DC
(The writer is a Research Fellow at the Employment Policies Institute.)