This week, another round of fast food protests occurred in major cities nationwide. The protests are part of the broader “Fight for $15” movement that seeks to more than double the existing federal minimum wage to $15 an hour.
While such a policy sounds like it could help low-wage employees, it would actually end up making many of them worse off. As Duquesne University professor Antony Davies explains in the video below, minimum wage hikes do not force employers to pay higher wages to every employee. They only force employers to pay higher wages to the employees he or she chooses to keep.
Though it may sound obvious, the fact that employers pay zero dollars to those they lay off or choose not to hire in response to a minimum wage increase is an important and often overlooked distinction in the minimum wage debate.
Davies explains the minimum wage disproportionately impacts the least-skilled and least-productive employees because they often don’t produce enough income for their employer to justify their mandated higher wage. Therefore, a higher minimum wage “doesn’t help the worker at the expense of the owner,” says Davies. “It helps the more productive workers at the expense of the less productive workers.”
The most productive employees don’t need the minimum wage; they can get raises no matter what. But for less-skilled employees – the very people minimum wage increases are supposed to help — minimum wages increase unemployment. “Fight for $15” protesters would do well to lay down their boxing gloves and ponder this for a moment.