Economists don't have a great reputation with Joe Six-pack. They don't have an especially good reputation with Jo Cognac for that matter. But there are a few aspects of formal economics that most people believe, primarily because they observe them all of the time. One of these is the Law of Downward-Sloping Demand: at higher prices, people tend to buy less of a good. It works that way because everyone lives within a budget -- at higher prices you simply can't afford as much -- and because nearly every good has substitutes we can switch to when something becomes less affordable. These demand factors may not be dramatic in the immediate aftermath of a price change, but eventually, inevitably, people figure out how to adjust their behavior to get more for their money.

Do politicians and others believe that employers' demand for labor is not downward sloping? When the minimum wage is increased, it cannot cause an increase in the demand for labor. Indeed, it must cause a decrease in the number of jobs that firms can offer. We are told that corporate profits are so high they can afford to pay higher wages. Certainly some can. But no firm will hire more workers at higher wages and there will be firms that do not have huge profits and which will have to cut back employment (or shut down or move to a country without high wages!).

And if the negative employment effect of an increase in the minimum wage is small in the short run it will certainly be greater in the long run. Entry level jobs will be lost; substituted for over time. And once that transition occurs those jobs won't come back.

Now consider whom this higher minimum wage is supposed to help: the working poor. It probably won't be the college student's summer job at Nordstrom's that disappears; it will be the inner city, break-even-firm's job for the kid that just finished high school. It won't be the suburban teen's McDonald's job that vanishes; it will be some person who now has an excellent chance of never getting that first job until they have otherwise ruined their life. What do you suppose are the lifetime employment prospects for people who can't get a first (legal) job of any kind before they turn 21? If you guess they aren't very good, you're correct.

And what of the argument that some job seekers believe it isn't worth it to work at a low minimum wage. Like many things in life, finishing high school for instance, we have to remind people that some benefits are not immediate. Every new employee is a risky asset to their employer. After information is revealed and the risks are diminished, they are typically paid more. Work experience, like formal schooling, is by itself valuable and often means that future jobs will start above the minimum wage. But getting a good future job is contingent on getting that first job.

Politicians think that raising the minimum wage now is okay because unemployment is low; indeed, the number of people working at the minimum wage is low. Another way to look at today's economy is to celebrate its willingness to provide jobs to persons who have much to gain from work experience. Increasing the minimum wage risks the very jobs that are the best anti-poverty program that exists. It makes no sense.