Minimum-Wage Increase A Bad Idea All Around

Posted on February 04, 2011

Advocates of a minimum-wage increase in Maryland claim it will help stimulate the state economy (“Group pushes to increase minimum wage,” Jan. 18). They may wish that were the case, but the economic evidence shows otherwise.

New research from 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
Research Fellow
Employment Policies Institute
Washington