Basu’s Analysis of Minimum Wage Fails

Rekha Basu’s recent column (“Minimum Wage Can’t Provide Basic Needs,” June 7) may tug at the heartstrings, but it fails to address the fundamental issue at hand: A minimum wage hike will harm the people it’s supposed to help.

The economics aren’t tough to understand. Businesses that hire entry-level employees who earn the minimum wage — think restaurants or grocery stores — keep a few cents in profit from each sales dollar and can’t just absorb the cost of a mandated wage hike.

Raising prices typically isn’t an option, because higher prices means fewer sales. That means employers are forced to do more with less — as in, more customer self-service and fewer job opportunities for inexperienced employees, like teens looking for their first summer job.

The evidence overwhelmingly backs up this intuition: Eighty-five percent of the credible economic research on the minimum wage from the last two decades points to job loss following a wage hike.

— Michael Saltsman, research director, Employment Policies Institute, Washington, D.C.