Economists Agree: Minimum Wage Hikes Kill Jobs

Posted on March 22, 2011

Restaurant owners and other low-margin employers are crying out for relief from Nevada’s onerous labor costs, among the highest in the nation. With last year’s mandated increase in the state minimum wage, one small business owner warned “some people may lose their jobs.” But no matter. Tsedeye Gebreselassie of the National Employment Law Project knows what’s best for these employers and their employees — even higher labor costs (“Minimum wage doesn’t kill jobs,” Sunday Review-Journal).

Nevada’s 33 percent teen unemployment rate was among the highest in the nation in 2010. Research from West Point found that each 10 percent increase in a state’s minimum wage has decreased teen employment by as much as 3.6 percent.

Instead of relying on a few outliers that tell activists what they want to hear, we should look at the academic record: according to economists from the Federal Reserve Board and the University of California-Irvine, 85 percent of the best studies on the subject confirm the widely accepted economic consensus that increases in the minimum wage lead to job loss.

But you don’t need to take my word for it, or theirs. Just ask the one out of three teens in the Silver State who went looking for work last summer and couldn’t find it.

Michael Saltsman
Washington, D.C.
The writer is a research fellow with the Employment Policies Institute.