The economic case for keeping the minimum wage at $7.25

Hiking the minimum wage would inevitably mean some people get paid more — but others would lose their jobs entirely

Minimum-wage strikes
(Image credit: (Rick D'Elia/Corbis))

Economics often gets a bad rap. It has been derisively branded "the dismal science." Economists are accused, like the local weatherman, of always being wrong. Yet, the study of economics is simply the study of human nature and humans' reactions within the context of a market economy. And if more policy makers and voters truly understood the fundamentals of economics, they might find themselves on the other side of the now-popular argument to raise the minimum wage.

Liberals employ a raft of studies and some specious arguments to back up their minimum-wage-raising stance, touting them as proof that hiking the minimum wage helps both workers and the broader economy. The problem is, many of these studies mix up causation with correlation. And many contradict each other. This Huffington Post article cites a study projecting that the economy would grow by $22 billion and create 85,000 new jobs, all from the initial phasing in of a minimum wage hike from $7.25 to $10.10. Yet the CBO (the independent government analyst for the economy) predicts that 500,000 jobs would be lost.

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