Brookings Economist: $15/hr Minimum Wage Could Hurt Poorest Workers

business_ethics_highlights_2If you think only Koch-funded ideologues worry about the effects of a large minimum wage increase on poorer workers, have a look at what Brookings Institution-affiliated labor economist Harry Holzer has to say about the consequences of a large minimum wage increase on the very people it is intended to help. Holzer does an excellent job of pointing out the peculiar effects of local minimum wage increases (e.g., driving low-wage jobs to nearby jurisdictions unaffected by the minimum wage increase), as well. >>>

LINK: A $15-hour minimum wage could harm America’s poorest workers (by Harry J. Holzer in Brookings)

[I]t might take time for employers of many low-skill workers to learn how to economize on their labor costs, but they will over time, since the incentives to do so are much larger – and that would be bad news for the very low-skill workers the higher minimum wage is designed to help. For instance, fast-food workers might be more easily replaced by robots. Hotels may reduce their tendency to automatically clean the rooms of their guests, and may charge extra for doing so. In the state of New York, fast-food franchises will probably be replaced by other kinds of restaurants and food services. Employers in these industries will also likely demand better education, skills and experience among those whom they hire.

What do you think?


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4 comments

  1. Francis Bellamy

    I would like to see Harry Holzer’s argument but the link is broken.

  2. Francis Bellamy

    Here it is: http://www.brookings.edu/research/opinions/2015/07/15-dollar-minimum-wage-harm-economy-holzer

    Yes, it’s not at all a Koch lobbyist type argument. The full article does not reflect the views of the Fraser Institute or any allied organizations. Thus, it provides balance on your site!

  3. Francis Bellamy

    This link provides some evidence of the behind the scenes activities of foundations that shape the debate about business ethics and CSR. The Ford and Rockefeller Foundations have supported activism and scholarship that challenges laissez-faire capitalism. Here we see the results at the Aspen Institute:

    https://www.linkedin.com/pulse/amorality-markets-judith-samuelson

    In the 1970s, Lewis Powell and William Simon called for business-supported foundations to defend capitalism,
    thereby contributing to the rise of an alternative foundation network. It’s no surprise that the Fraser Institute publishes challenges to the minimum wage, nor that Ford-funded research might recommend increases.
    The dueling foundations generate heat and light and confusion.

    The larger story about the minimum wage is how public policy in the U.S. since the 1970s has led to a significant decline in the income floor and has contributed to growing inequality.

    (Last post. Carry on!)

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