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IPFS News Link • Economy - Economics USA

The Minimum Wage Is Like A Proxy Labor Union

• Business Insider

Predictably, an op-ed battle immediately sprang up, with half of the commentariat arguing that a higher minimum wage would simply hurt low-skill workers seeking a job (and some adding that wage subsidies would be a far better option) and the other half arguing that higher wages at the bottom of the income spectrum are long overdue.

Ezra Klein falls into the latter camp, saying that the chart below should tell us everything we need to know about the case for a minimum wage:
Mr Klein argues that a minimum wage is like a proxy labour union; sure it may have some employment effects, but it effectively raises the wage bargaining power of those workers who do manage to find employment.