In the above video, Congresswoman Marsha Blackburn of Tennessee worries that raising the minimum wage will keep teenagers out of the workforce, preventing them from gaining valuable experience:
I remember my first job, when I was working at a retail store, growing up down there in Laurel, Mississippi, I was making like $2.15 an hour. And I was being taught how to responsibly handle those customer interactions, and I appreciated the opportunity.
Travis Waldron crunches the numbers:
[W]hat Blackburn didn’t realize is that she accidentally undermined her own argument, since the value of the dollar has changed immensely since her teenage years. Blackburn was born in 1952, so she likely took that retail job at some point between 1968 and 1970. And according to the Bureau of Labor Statistics’ inflation calculator, the $2.15 an hour Blackburn made then is worth somewhere between $12.72 and $14.18 an hour in today’s dollars, depending on which year she started.
Relatedly, McArdle wonders how indexing the minimum wage for inflation would impact the economy:
Would we see a sharp spike in the unemployment rate? Unlikely. Even if 10% of minimum wage workers were laid off, that would be a fraction of 1% of the overall job market. But I would expect to see higher unemployment among young and low-skilled workers during recessions, when employers are facing a lot of pressure on their margins. If your sales fall by 30%, so does the output of each worker. So that overall, monetary policy would become at least slightly less effective at managing the employment declines during recession.