Saturday, October 26, 2013

Minimum wage = Maximum stupidity

Cafe Hayek has a short post today that includes a link to a summary of 50 years of research on the effects of minimum wage laws through 1995.  The bottom line of all this research: minimum wage laws are destructive for society as a whole, the economy in particular, and are especially harmful to those the laws are intended to help.  From the CH post, citing a portion of the research summary:
The following survey of the academic research on the minimum wage is designed to give nonspecialists a sense of just how isolated the Card, Krueger and Katz studies are.  It will also indicate that the minimum wage has wide-ranging negative effects that go beyond unemployment.  For example, higher minimum wages encourage employers to cut back on training, thus depriving low wage workers of an important means of long-term advancement, in return for a small increase in current income.  For many workers this is a very bad trade-off, but one for which the law provides no alternative.
You can access the research summary itself, here.  Don't worry -- it's written in language that the average layperson can understand and is actually pretty darn interesting. (BTW, research in this area since 1995 has only served to further confirm the findings in this research summary).