December 04, 2013
My friend and co-author Jared Bernstein has a good post on the minimum wage this morning. It would benefit from one additional point.
While Jared acknowledges that the minimum wage may lead to some job loss it is important to note that jobs in the low wage labor market tend to be high turnover jobs, although turnover is likely to be slower in response to a higher wage. The reason why this matters is that when we talk about job loss in response to a minimum wage hike, we rarely are talking about people literally losing their jobs. Essentially this means somewhat less employment.
That would play out in the form of workers taking longer to find jobs. This could mean, for example, that workers may expect to work an average of 1 percent fewer hours in response to a hike of 10 percent in the minimum wage because it takes them longer to find a job. However, they could expect to get 10 percent more money for each hour they work. That is the sort of trade-off we would be talking about based on the extensive research on the topic.
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