That would have been my headline. David Neumark, an economist who has devoted much of his career to research that is intended to show why the minimum wage is bad, was quoted in an NYT article as saying that the proposed minimum wage hike would reduce employment among the least skilled workers by 4 percent.
Okay, it's fun with numbers time. The minimum wage hike to $7.25 an hour will increase the wage for the those at the very bottom by 40.8 percent. Mr. Neumark believes that it will result in a 4 percent decline in employment, according to the article. That means that these least skilled workers will on average end up with 35.1 percent higher wages after the minimum wage hike than they do now (0.96*140.8 percent). That sounds like a pretty good deal for those at the bottom.
Taking the average is appropriate for those at the bottom, since most minimum wage jobs have high turnover. That means that we are not generally talking about 4 percent of the least skilled workers being thrown out of work if we raise the minimum wage. Rather, we are saying that it will take these workers a bit longer to find a new job when they change jobs.
So, the deal is 4 percent fewer hours of work, but hourly wages that are 40.8 percent higher when you do work. I suspect that most of the least skilled would consider this an improvement.
I’m writing to you today with a sense of urgency that I haven’t felt since I began my journalism career. As executive editor of The American Prospect, I’ve witnessed firsthand how independent journalism serves as a crucial bulwark against the erosion of our democratic institutions. Today, that role is more vital than ever. Can you step up today and show your support?
The winds of authoritarianism are blowing stronger. We’re seeing alarming signs of a coordinated effort to silence critical voices and undermine the very foundations that support progressive causes. As Bob Kuttner presciently wrote in our August 2024 issue, a weaponized IRS could attack the very foundations of the progressive movement. We need readers to step up and help us dig in for the long haul.
We’re falling behind in our spring fundraising campaign, and with so much at stake we can’t afford to come up short. If you value fearless, independent journalism that holds the powerful accountable and defends democracy, now is the time to step up. The American Prospect depends on reader support to stay in the fight. Pitch in today and help us close the gap. Please consider making a donation today.
–David Dayen, Executive Editor
Copyright 2025 | The American Prospect, Inc. | All Rights Reserved