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The Deadweight Loss of Minimum Wage Hikes

Gary23 Wrote: Mar 03, 2013 7:35 AM
When prices go up, pay goes up, not minimum wage. Businesses make more, they pay workers more. Minimum wages go up, businesses charge more to make up the loss of profit. If wages stay the same, and prices go up, profits are higher, giving more money for wages. The only way this doesn't work is when costs go up. Then prices go up with no increase in profits.

Has boosting the U.S. minimum wage from $4.25 per hour in 1994 to today's $7.25 per hour helped or hurt the U.S. economy?

To answer this question, we'll be tapping the U.S. Census Bureau's data on the incomes earned by 15 to 24 year old Americans in 1994 and 2011 (which until this September represents the most recent year for which this data is available). Specifically, we'll be considering the size of the Age 15-24 population, the number of 15-24 year olds with incomes and, of course, the federal minimum wage that applied in each...