Duncan Wilden

The minimum wage: does it hurt workers?

Duncan Wilden

While standard economic theory predicts that minimum wage hikes cause unemployment, a paradigm shift initiated by Card and Kruger's 1992 study revealed that employer monopsony power often allows wages to rise without significant job losses. This empirical evidence has driven global policy adoption and created a complex patchwork of local regulations, as seen in conflicting Seattle studies regarding hours versus earnings. Currently, President Joe Biden's proposed federal $15 wage floor represents an unprecedented national experiment that economists await to resolve whether the scale of this increase poses a risk to employment or serves as a necessary economic lift.