Minimum Wage Increase Bad Idea

Posted on February 04, 2011

Advocates of a minimum wage increase in Maryland claim it will help stimulate the state economy (“Minimum wage bill sends shivers down spines of employers,” Jan. 28). 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 Mary- land’s economy.

Michael Saltsman
Research Fellow, Employment
Policies Institute
Washington, D.C.