Nicodemus Wrong on Minimum Wage

Aaron Nicodemus’ opinion piece in favor of a minimum wage hike with annual increases based on inflation (“Minimum wage should be tied to consumer index,” Sunday Telegram, June 16) is high on emotion but short on fact. As a result, he missed some basic economic evidence.

The economics aren’t tough to understand. Businesses that hire entry-level employees who earn the minimum wage — think restaurants or grocery stores — keep a few cents in profit from each sales dollar and can’t just absorb the cost of a mandated wage hike. Raising prices typically isn’t an option, because higher prices mean fewer sales. That means employers are forced to do more with less — as in, more customer self-service and fewer job opportunities for inexperienced employees, like teens looking for their first summer job.

The evidence overwhelmingly backs up this intuition: Eighty-five percent of the credible economic research on the minimum wage from the last two decades points to job loss following a wage hike.

Research Director
Employment Policies Institute