Does raising the minimum wage cost jobs?
One of the most studied questions in economics, and a clean case of theory meeting evidence.
Side A
Small or no job losses at moderate levels
Employers with market power can absorb higher wages; turnover falls and productivity rises.
Evidence
Card and Krueger (1994). Cengiz, Dube, Lindner and Zipperer (2019) studied 138 US state increases and found the number of low-wage jobs essentially unchanged. UK evidence since the National Living Wage (2016) has found little employment loss.
Side B
Job losses, especially for the least skilled or at high levels
Basic supply and demand: raise the price of labour and firms buy less of it, or cut hours.
Evidence
Seattle's rise to $13 cut hours for low-wage workers (Jardim et al., 2022). The US Congressional Budget Office (2019) estimated a $15 federal minimum would cost 1.3 million jobs in its central case, while lifting 1.3 million people out of poverty.
What to watch
Where I lean
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