Minimum Wage Debate Summary

As a teenager, one of the first things that you look forward to is turning sixteen, becoming employed and earning your own money. Teens are usually already aware they will be making minimum wage, at least until they obtain a raise or a promotion. In the article, Economists Debate the Minimum Wage, Robert P. Murphy discusses the effects that the raising of the federal minimum wage might have on the employment rate. He explains that the current minimum wage is a big issue in terms of teen employment, meaning that “the demand for low skilled labor is very inelastic.” The manipulation of the wage could make it more difficult for teens and low skilled workers to come by a job, lowering the employment rate altogether. The effects of the raising of the minimum wage …show more content…
The article states that even though the employment rate does not decrease by a negligible rate if the minimum wage rate rises, the rise “drastically impaired the functioning of the labor market. The "glut" of workers on the market means that non-price allocation mechanisms must come into play.” Murphy is arguing that since the minimum wage will increase, there will be less opportunities for low skilled and teen laborers, as well as, higher skilled workers competing for minimum wage jobs. Those higher skilled workers are more likely to get hired over candidates with less experience. Murphy also believes that “It is much more likely that an applicant will need to "know somebody" to get hired, and that teenagers from "respectable" backgrounds will be the ones to work at fast food restaurants, displacing teenagers who might be in more desperate circumstances.” This dynamic will cause a decrease in the positions available to low skilled and teen workers, which reaffirms the concerns that a raise in the federal minimum wage might hurt the people it was initially intended to