Economists disagree about the effects of raising the minimum wage—but not as much as you might imagine. Almost all of the serious debate is whether an increase of 20 percent or less will have a detrimental or negligible effect on workers and the economy.
Some economists, especially those who think the minimum wage should be $0, content that any increase is harmful. Others think the current federal minimum wage could be bumped up by 20 percent before it would lead to increased unemployment. That’s a change from $7.25 an hour to $8.70 an hour.
In a more economically literate world, that would be where the debate remained. Instead, we have advocates in America (including the entire Democratic Party) who want to raise increase the federal minimum wage by 107 percent. The ‘Fight for $15’ continues even as many prominent left-of-center economists are warning that such an increase would be incredibly risky.
“At the $15 wage level, even liberal economists acknowledge the law of unintended consequences,” said Michael Saltsman, research director at the Employment Policies Institute. “If Democratic candidates are interested in helping the poor, they could start by listening to their own economists…”
But while some liberals in the U.S. choose to ignore economic reality, socialists in Venezuela refuse to admit that any such reality exist. Yesterday, Venezuela’s socialist President Nicolas Maduro announced a 50 percent hike in the minimum wage and pensions.