Here is part of my response to a reader who proposes a higher minimum wage of $15 an hour in the United States, arguing that it can result in higher pay with minimal price increases. But I ask, what about overall employment?
“I have personally seen the case where an imposed higher than market wage has resulted in better pay with the same number of employees as there would otherwise be, and the company still being able to make a profit.
The example I’m referring to is a franchise coffee shop at the university I went to where the workers are unionized and get at least several dollars above the minimum wage.
While you are right about scenarios where an imposed minimum wage increase could result in big gains for affected employees with relatively minimal cost increases, one thing that generally will be affected is employment.
It is for that reason that I feel I don’t feel I should support restricting the job opportunities of others, and this is particularly noticeable with youth unemployment, where, due to other factors like a relatively high high school dropout rate of 15% and over, such students will have a difficult time seeking as many jobs at a highly increased minimum wage.
The university coffee shop is a special case, because of the power of the university in being able to regulate employment and competition of food options in light of a high on-campus demand.“