Just a few days ago, Arpit pointed me to Greg Mankiw’s discussion of the Neumark-Wascher study that reevaluated the still-famous Card-Krueger analysis of the impact of an increase in the minimum wage on employment levels (a mouthful). Mankiw has written a short post today that cites yet another post from the Political Calculations blog. Ironman writes:

In 2006, the last full year in which the U.S. federal minimum wage was a constant value throughout the whole year, at least before 2010, approximately 6,637,649 individuals in the United States earned the 2010 equivalent of $7.85 per hour or less.
For 2010, the first full year in which the U.S. federal minimum wage was a constant value through the year since 2006, the U.S. Bureau of Labor Statistics estimates that an average of just 4,361,000 individuals in the United States earned the same equivalent of the current prevailing federal minimum wage of $7.85 or less throughout the year.

After comparing these numbers to the average number of civilians employed in 2006 and 2010, he writes the following:

So, in percentage terms of the change in total employment level from 2006 to 2010, jobs affected by the federal minimum wage hikes of 2007, 2008 and 2009 account for 42.5% of the total reduction in jobs seen since 2006.

I have no idea if this is the right way to think about the issue. It is certainly suggestive, and the Neumark-Wascher result would lead us to believe that an increase in the statutory minimum wage would tend to decrease employment levels, whether in total number of jobs or the number of hours worked.

One could argue that jobs below today’s statutory minimum wage are so problematic and would require so much in the way of state-provided work supports that this is ultimately trivial — e.g., it is a good thing that organized labor (remember raising rivals’ costs?) and its allies worked so assiduously to raise the cost of hiring less-skilled workers, as jobs paying such low wages are intrinsically a bad thing and unemployment is a better option. Or perhaps one could argue that an increase in the statutory minimum wage actually helped prop up demand, and the employment picture would look worse in its absence. Or perhaps there is a political theorist somewhere who would send us in a different, eye-opening direction.

I’ll just suggest that attachment to the labor force can be a good thing in itself, particularly for ex-offenders, young workers, and other people who find themselves on the margins of the economic mainstream. Using taxpayer-funded work supports to encourage full-time employment and to make it a viable way to make a living strikes me as a decent idea, while raising the statutory minimum wage in a way that makes attachment to the labor force less rather than more likely strikes me as a really bad idea. (I eagerly await the moment when someone will suggest that this view flows naturally from the political economy of the antebellum South.)

There is another way of looking at this issue. A number of states, in 2006 and 2008, had referendums on raising the statutory minimum wage, an effort that in some respects paralleled the 2004 ballot initiatives banning same-sex marriage. Part of the strategy was to mobilize left-of-center voters to help elect labor-aligned politicians to office. It could be that the increase in the statutory minimum wage, and the attendant unemployment it may or may not have caused, was worth the various accomplishments of the first two years of the Obama presidency. It should go without saying that this is not my view, but I always find it interesting to think through how others might see things.