Recently, the Congressional Budget Office released a study on a proposed minimum wage hike. Its conclusion was that raising the minimum wage by 39 percent from $7.25 to $10.10 would reduce employment by roughly 500,000 jobs.
I appreciated this study, not least of all because in 2010 I published a study that concluded that the 41 percent increase in the minimum wage after 2007 cost the U.S. economy some 550,000 jobs.
The study looked at all the peer-reviewed economic research on the minimum wage and combined it with labor force data to craft a simulation model on the effects of the proposed change. I built a historical model of changes in employment, controlling for the recession, trends, seasonal dynamics and demographics. We both came up with the same answer to roughly the same question.
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