It remains true that millions of Americans who lack sufficient education and training find themselves stuck in minimum-wage jobs for years. But their American Nightmare cannot be ended by increasing pay to levels that exceed their productivity.
With the arrival of the new year, Massachusetts increased its minimum wage to $11 an hour. Liberals and the working poor are celebrating, claiming it will make a real difference for low-wage workers, and brings them closer to the fabled $15 per hour wage that is already law in some places, including Seattle and San Francisco.
Their celebrations would be much quieter if they understood the real effects that minimum-wage increases have on employment.
There are three such effects that must be examined: Immediate, long-term and psychological.
An enormous amount has been written about whether minimum-wage hikes increase, decrease or have no effect on employment. The effect, it turns out, is mostly a function of politics.
I’m only half-kidding.
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