Increase in the Minimum wage that kills jobs?

President Obama has called for increasing the minimum wage, saying that this will help some of the poorest Americans. Opponents argue that a higher minimum wage will lead employers to reduce jobs. 

It is difficult to determine the effect of the increase in the minimum wage. Ideally, you want to compare a universe where the minimum has been raised against an alternate universe where he remained fixed. 

Economist David Card found the next best thing. In 1992, New Jersey was about to increase its minimum wage. Next door, there's a parallel universe : Pennsylvania, which was not to increase its minimum wage. 

Map and a colleague decided to investigate what happened to jobs in fast-food restaurants in both States. They interviewed restaurants and found that the number of jobs actually increased in New Jersey, which has increased its minimum wage by the number of jobs in Pennsylvania who did not. 

Map theorized that employers were less money. The price of hamburgers have increased. But as much as he could say, raising the minimum wage does not end up costing jobs. 

The study and the subsequent book, myth and measurement : the new economics of the Minimum wage, bugged Economist David Neumark. He explains : 

" It was presented as, 'Economics have all wrong. ' And I think that coupled with the evidence that the data seemed a bit strange, really led us to say, ' Let's go back and get what we believe will be better data, and repeat all. » " 

Neumark and a colleague received actual payroll data of fast-food restaurants in New Jersey and Pennsylvania. They came to the opposite conclusion : the slightly reduced minimum wage jobs increase. 

But it wasn't the end of things. The authors of the original article is then went back and Redid the experiment using data from the Government. And they came to the same conclusion from the first study : minimum wage increase did not cost jobs. 

Findings like these are the reason why the debate on the minimum wage in the process - not only among politicians but among economists. 

The most recent study, published by the Bureau of the Congress Budget in February, said raising the minimum wage could cost 500, 000 jobs. But it would also increase hourly wage for more than 16 million people.