I have been following the debates on the minimum wage in view of the forthcoming increase of the federal minimum wage in the United States. And there is something that is bugging me to no end: the explanation provided by labor economist for why there’d be a limited employment effect.
Notice that I say employment effect and that I thus limit myself to the number of bodies hired. I am also not going to consider the distribution of elasticities found since the seminal work of Card and Krueger that tends to point to negative effects on employment and even clearer effects on hours of work. I am also not going to account for other adjustment channels like those that Brian Albrecht discusses here. I am especially going to discount issues of minimum wage enforcement.
I am just going to focus on the channel for why I’d be…
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Utopia, you are standing in it! 
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