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The impact that a minimum wage requirement has on an economy depends on how high it is set, but in general, while a minimum wage requirement might raise the wages of certain unskilled workers, because these requirements don’t come with any additional revenues for the businesses paying them, they also tend to destroy some jobs at the lower end of the economic spectrum.
While this negative relationship between a minimum wage requirement and employment is clearly established at both the federal and state level, a number of economists argue that the impact on wages is more important than the impact on jobs. So the debate is really over the trade off - whether it’s better to have fewer people employed at a higher rate or more people employed at a lower rate.
Contributing editor of City Journal and Manhattan Institute senior fellow, Steven Malanga
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