When the lowest pay rises, what happens?
Still, when all the effects are tallied up, economists say that the lowest-wage workers do get a real pay raise.
No kidding. Other effects are a bit trickier but that one is not tough to figure out.
His model suggests some of the complex ripple effects – and the possible magnitude of changes. The study predicts that, two years after the minimum of $7.25 goes into effect, total employment in the US would fall by 0.17 percent. That’s roughly the loss of one job in every 600. The pay gain for workers affected by the wage hike might approach 8 percent.
It is true jobs can be lost but at low rates that effect is very small. As the unemployment rate rises the job losses would increase with similar raises in the minimum wage. Raising the minimum wage to $7.25 now is a good idea – it should have been raised earlier.