Whenever Congress debates raising the minimum wage, policymakers reflexively turn to economists for advice, and nearly all economists, regardless of their ideological orientation, say with unyielding conviction that a higher minimum wage will produce higher unemployment. The only difference between conservative and liberal economists is that they latter say the increase will be negligible, but at least the remaining low-income workers will earn a bit more.
But as Rob Atkinson writes in American Compass, nearly all economists are wrong. Raising the minimum wage would not increase unemployment; it would increase living standards for low-income workers—and, critically, it would boost overall U.S. productivity growth for the simple reason that when the price of labor is high, the return on investments in labor-saving technology is higher.
