This keeps getting posted, but the answer is that other strands of research found both employment losses and relatively significant price pass through.
The minimum wage is an incredibly nuanced topic, and articles like this do it a disservice.
Here is what we know about the minimum wage.
1. Overall estimates find (at most) small job losses from minimum wage increases. There is a substantial amount of 0 estimates, however.
2. There can be positive employment effects, in monopsony models. Empirical evidence of this exists.
3. Even if employment doesn’t fall, there are other mechanisms that exist that can worsen both worker and social welfare: reduced hours of work, reduced non wage benefits, higher prices, reduced training, changes in the composition of the workforce. There’s evidence that these play some role in minimum wage responses.
4. There are secondary positive and negative impacts from minimum wages (externalities) in: crime, education, health, time with children, …
Ownuyasha on
Anyone that’s been to any fast food place in California knows this isn’t true, they’ve doubled the prices and reduced the staff by 75%, quality has suffered and there is literally no reason to eat fast food anymore because it costs the same as ordering good food from a sit down restaurant
2 Comments
This keeps getting posted, but the answer is that other strands of research found both employment losses and relatively significant price pass through.
https://www.nber.org/papers/w34990
https://www.nber.org/papers/w34033
https://www.tandfonline.com/doi/abs/10.1080/13504851.2026.2641130
The minimum wage is an incredibly nuanced topic, and articles like this do it a disservice.
Here is what we know about the minimum wage.
1. Overall estimates find (at most) small job losses from minimum wage increases. There is a substantial amount of 0 estimates, however.
2. There can be positive employment effects, in monopsony models. Empirical evidence of this exists.
3. Even if employment doesn’t fall, there are other mechanisms that exist that can worsen both worker and social welfare: reduced hours of work, reduced non wage benefits, higher prices, reduced training, changes in the composition of the workforce. There’s evidence that these play some role in minimum wage responses.
4. There are secondary positive and negative impacts from minimum wages (externalities) in: crime, education, health, time with children, …
Anyone that’s been to any fast food place in California knows this isn’t true, they’ve doubled the prices and reduced the staff by 75%, quality has suffered and there is literally no reason to eat fast food anymore because it costs the same as ordering good food from a sit down restaurant