Raising Minimum Wage Hurts

Posted on February 10, 2011

California Assemblyman Luis Alejo claims his proposal to raise the state minimum wage will help boost the state economy (“Alejo’s timing is off on AB 10,” The Californian editorial for Feb. 3).

Alejo 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 teenage employment by 3.6 percent.

Less business output and lost jobs — hardly the way to help workers and boost California’s economy.

Michael Saltsman
Employment Policies Institute
Washington, D.C.