Minimum Wage Joblessness

Standing in line, marking time
Waiting for the welfare dime
'Cause they can't buy a job
--Bruce Hornsby & the Range

The minimum wage thread on these pages is well established. Because they force workers willing to work for less than the legal minimum to the sidelines, minimum wage laws amount to compulsory unemployment.

Although conceptual explanation is straightforward, the question of how much unemployment can be attributed to minimum wage laws in an empirical one. A recent Cato Institute study finds that as minimum wages rose by about 30% during the later part of last decade, these increases reduced the employment-to-population ratio by 0.7 percent. This amount to about 15% of the total decline in employment during the Great Recession period.

That people generally do not grasp the negative relationship between minimum wage laws and jobs demonstrates just how economically illiterate we are.