Here, via University of Wisconsin-Madison economist Menzie Chinn, is their result in a picture: On the horizontal axis, we see the strength of the effect of minimum wages on employment. A positive number means that a minimum wage is found to increase employment; a negative number means it decreases it. On the vertical axis, we see the precision of the studies — a higher point means a study with a bigger sample size, indicating greater accuracy.So what does this graph tell us? The average effect found in the econ literature is an elasticity of about -0.2 as indicated by the vertical red line. That means that a 10 percent increase in the minimum wage would decrease employment by about 2 percent. So if we doubled the minimum wage — a 100 percent increase — we would expect to see the employment of young people go down by a fifth.That’s a small but real effect — a $15 federal minimum wage might throw a million kids out of work. We would have to balance that negative effect against the broad-based positive effect of raising lots of low-income people’s earnings. Balancing the good against the bad is necessary to make a decision.
Office of Strategic Communication