It is certain that employment went up. Its also close to certain that new jobs went up less than they would have without the minimum wage increase.
Its likely, but falls short of "close to certain", that the raise in the minimum wage was a net negative. Some people got more, but would have anyway, some people lost jobs or more often didn't get them that would have, some people probably got fewer benefits or slightly worse working conditions, there would also have been some upward pressure on prices, so some would have had to pay more for things without benefiting from the increase (either being already over the new minimum, or being unemployed, or being self-employed). All of those but the first are bad, and its neutral. But other people would have gotten an increase because of the higher minimum. Exactly how big of factor each one of these things (and other results) are is uncertain. Exactly how much to weigh each change (how do you compare one person losing their job, and 5 or 10 not getting a job, with 5 or 10 or 20 or 50 or 100 getting a raise?) is subjective (even if you were certain about the exact numbers).
And that's just considering the short run practical effects. How much is investment in new businesses or expanding old ones discouraged by the higher costs, lower demand (if they raise prices to try to pass on the costs), and more government control. OTOH how much is investment in labor saving equipment increased? How do you weigh the benefit of the higher productivity that results from that investment, against the negative of lower demand for low skilled workers going forward (even if you can accurately measure each which would be very hard, any attempt to measure a net benefit or loss would rely on subjective preferences).
Government intervention to raise wages is likely to have little negative result on employment if it doesn't push wages well beyond what would be the market clearing rate (either the increase was very small, or the market clearing rate for even most low productivity labor was already above the minimum) but in such cases your also giving few people raises. Its also less likely to be very harmful when the economy is doing well, in a recovery, or in a steady expansion. It really has the most negative impact when things are very bad, and companies are desperate to cut costs. If I had lived in CA I would have opposed the increase, but if you had to have one 2014 wasn't a very bad time to have one.
The details are uncertain, and also different in each case, but there is pretty much no plausible scenario which results in anything but the most modest net benefit. Your more likely to have a large net loss (and more likely still, except for very large increases, to have a net loss that is modest). |
