The Job-Killing Impact of Minimum Wage Laws II
This CD post that featured a video on the job-killing impact of minimum wage laws generated some lively discussion, so I thought I would post the chart above showing evidence of the adverse effects of raising the minimum wage in the U.S. by 41% between 2007 and 2009. Of course, unemployment rates in general rose in 2008 and and 2009 due to the recession, so the chart above shows the "excess teenage unemployment" by taking the difference between: a) the teenage unemployment rate (data here) and b) the overall U.S. unemployment rate, i.e. teenage unemployment rate MINUS the overall unemployment rate. The "excess teenage unemployment rate" rose by about 5 percentage points, from about 11% to 16% following the 41% increase in the minimum wage from $5.15 in early 2007 to $7.25 by mid-2009.
Bottom Line: As much as politicians and other advocates of the minimum wage might pretend otherwise, the laws of supply and demand (like the law of gravity) are NOT optional.