Tuesday, February 13, 2007

The Impact of the Minimum Wage on Employment

The Free Exchange blog quotes an anecdote about the employment effects of a minimum wage increase:

This piece from the Arizona Republic surprises me by filling out its column inches with anecdotes about the negative effects of Arizona's higher minimum wage:

Some Valley employers, especially those in the food industry, say payroll budgets have risen so much that they're cutting hours, instituting hiring freezes and laying off employees.And teens are among the first workers to go. Companies maintain the new wage was raised to $6.75 per hour from $5.15 per hour to help the breadwinners in working-poor families. Teens typically have other means of support. Mark Messner, owner of Pepi's Pizza in south Phoenix, estimates he has employed more than 2,000 high school students since 1990. But he plans to lay off three teenage workers and decrease hours worked by others. Of his 25-person workforce, roughly 75 percent are in high school. "I've had to go to some of my kids and say, 'Look, my payroll just increased 13 percent,' " he said. " 'Sorry, I don't have any hours for you.' "

That is the one good thing about this latest increase. It will give us lots of opportunities to collect data on examples like this one.

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