Minimum Wages and the Economy

I didn’t know this sort of thing actually happened. I thought it was a threat from business to labor that never really happened. Or, at the very least, businesses just hired less and no one ever got fired as a result:

The study of part-time workers monitored by the U.S. Bureau of Labor Statistics from 1999 to 2009 found that raising the minimum wage to $7.25 during the recession caused some businesses to scale back on filling vacant positions or eliminate jobs altogether, said Michael Hicks, director of Ball State’s Center for Business and Economic Research.

Increasing the minimum wage was meant to raise the living standards of millions of Americans holding unskilled, entry-level positions.But it may have led to the elimination of 550,000 jobs — opening the possibility that such wage levels should be revised, a new study from Ball State University shows.

The businessman in me tells me it makes sense, though.

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