But the real world experience doesn't paint such a grim picture. Minimum wage changes, have not been shown in real world case studies to have very much of an effect on employment rates. The effects are usually cloudy & cannot be distinguished from the effects of say, a credit crisis.
Now economists can rationalise this in lots of ways...
How about this one? No minimum wage increase yet has exceeded the actual market value of the jobs in question. They have simply been feel-good placebos that have marginalized very few real workers while gaining political kudos for the administrations in power.
Any real attempt to raise the minimum wage too far beyond the market value of the labor will result in mass unemployment, mass inflation, or both. Its actually a kind of rationing, and behaves as such.
I don't think that is true. There are a large number of people in almost all countries that earn minimum wage.
In Australia, the minimum wage or equivalent ranges $14-$18 (AUD $1 = aprox US$0.95 a month ago, approx $0.70 now). This is probably close to the median for countries of comparable GDP pp. Many employers pay the minimum.
The minimal US minimum wage is relatively low. But there are plenty of other examples around.
Now economists can rationalise this in lots of ways...
How about this one? No minimum wage increase yet has exceeded the actual market value of the jobs in question. They have simply been feel-good placebos that have marginalized very few real workers while gaining political kudos for the administrations in power.
Any real attempt to raise the minimum wage too far beyond the market value of the labor will result in mass unemployment, mass inflation, or both. Its actually a kind of rationing, and behaves as such.