Thursday, February 20, 2014

(Related update): Minimum wage = maximum unemployment

Related update:  A few days ago the Congressional Budget Office released a report indicating that Obama's desired increase in the minimum wage to $10.10/hr. would, of course, result in the loss of hundreds of thousands of jobs in America.  The report is very annoying to the White House since it follows on the heels of an earlier CBO report showing that Obamacare would destroy up to 2.5 million jobs by 2024.  Here's an excerpt from a Washington Times news article:
Raising the minimum wage to $10.10 an hour will cost the U.S. economy a half-million jobs by 2016 but will substantially boost wages for most low-income workers, according to a Congressional Budget Office report released Tuesday that adds a significant hurdle to Democrats’ push for an increase...

Republicans predicted that the CBO report will bolster opposition on Capitol Hill, where the issue is likely to come up for votes in the next few weeks.
Original post (1/31/15):  Well, nearly, and is particularly the case in Europe.  Consider this graph (as always, click to enlarge):

The graph is from a valuable post over at the Cato-@-Liberty blog by Steve Hanke.  In his words:
Yesterday, in the wake of Tuesday’s State of the Union address, I poured cold water on President Obama’s claim that a hike in the minimum wage would benefit the United States’ economy, pointing specifically to unemployment rates in the European Union. The data never lie: EU countries with minimum wage laws suffer higher rates of unemployment than those that do not mandate minimum wages. This point is even more pronounced when we look at rates of unemployment among the EU’s youth – defined as those younger than 25 years of age.