The LA city council recently decided to raise the minimum wage to $15, joining San Francisco and Seattle in the battle to help the working poor. I was resisting further commentary on the minimum wage until I saw todays Robert Samuelson column in WP.
Each side on the minimum wage debate cherry picks the economics research to support their politics. Samuelson provides a good summary of mainstream findings: there is some job displacement but it has been modest. However, this is based on historical evidence for the nation as a whole or for entire states. What is unique about these cases is that (1) the increases are quite large (67%) compared to historical changes (10 to 15%) and (2) there is much more room for employers to move jobs across city boundaries as compared to state or national boundaries. Samuelson speculates that restaurant employment will not be affected as much as hotels and manufacturing. (Who wants to drive 10 miles in LA traffic to save 50 cents on a cheeseburger?)
One guaranteed winner from all this: labor economists who will have a lab experiment for evaluating the impact of the $15 minimum wage.
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