In its top of hour news segment today, Morning Edition joined the media chorus telling us that the minimum wage hike could increase unemployment and prolong the recession. (Here's USA Today's entry.) There is no doubt that employers of low-wage earners are unhappy about paying higher wages, just as they are unhappy about the rise of health insurance premiums every year. (For employers who provide coverage, the latter will be a much greater expense.) However, there is little reason to believe that it will result in substantial job loss. The impact of a rise in the minimum wage on employment is one of the most heavily researched topics in economics. Virtually all of this research shows that it will have little or no impact on employment. It would have been useful if the news reports had mentioned this research instead of treating this topic as a he said/she said, implying that those who claim that it will lead to large rises in unemployment are on an equal footing with those who emphasize the benefits to low wage earners. Reporters should have the time and expertise to find the evidence on this issue, readers do not.
--Dean Baker
