Answering an Objection to Raising the Minimum Wage

[Oakvale]

I'm not really sold on the idea of doubling the US minimum wage (at least not in one fell swoop) but simple criticisms of the idea like that tend to overly rely on Econ 101 classes where you learn something like this -



- and, floored by the simplicity of classical models, adopt the worldview that MINIMUM WAGES CREATE DISEQUILIBRIUMS AND RAISE UNEMPLOYMENT without really considering the scale of the effect.

There's obviously going to be some correlation between higher unemployment and a higher minimum wage, but the important question here should be whether the benefits of the higher wage outweigh the increase in unemployment. As far as I'm aware the empirical evidence indicates that it's probably not a 1:1 relationship. That's not to say that doubling the minimum wage overnight wouldn't cause a pretty nasty shock to the market but if we're just talking in general terms here...