[hipsters_unite]

> Imposing a price floor on labor does nothing besides driving up unemployment.

Do you have any evidence to back that up? I know it was orthodoxy like twenty to twenty-five years ago, but I remember there were plenty of other theories in my university days.

Pushing young people out of the job pool isn't such a bad thing if there's an educational alternative. Besides, people on lower incomes spend a larger proportion of their income, rather than saving.

Directly increase their disposable income with a minimum wage and I find it hard to believe there won't be an increase in spending in the economy - and that has its own multiplier effects.

Besides, even if what you say is true, then you could pragmatically combine policies for effect; an increase in minimum wage with say, government spending on education initiatives, or raising the mandated school leaving age.

[morgante]

> Do you have any evidence to back that up? I know it was orthodoxy like twenty to twenty-five years ago, but I remember there were plenty of other theories in my university days.

There have been dozens of studies which show a positive correlation between minimum wage and unemployment. Here's just one: http://businessinnovation.berkeley.edu/williamsonseminar/rub...

> Pushing young people out of the job pool isn't such a bad thing if there's an educational alternative.

That might indeed be true, but the problem with a price floor is that you have no control over which workers are displaced. I actually think in many places employers would prefer to keep the teens who can, ex. carry more boxes per hour, than older and potentially more vulnerable workers.

Hence, the right solution is to attempt to shift the supply of minimum wages by ex. providing more support/incentives for college education.

> Directly increase their disposable income with a minimum wage and I find it hard to believe there won't be an increase in spending in the economy - and that has its own multiplier effects.

I'm actually not convinced of that. People living on minimum wage often have negative net worth and depend on credit for day-to-day expenses. Hence all that marginally increasing their wage will do is decrease their indebtedness, not increase their spending. Of course, a huge jump in the minimum wage would be enough to push every employed person into the middle class. But it would provide substantial incentives for automation and essentially eliminate low-skill jobs, creating mass unemployment.

[protomyth]

"Pushing young people out of the job pool isn't such a bad thing if there's an educational alternative."

Do you have any evidence to back that up? You seem to have a very narrow view of "education".

"Besides, people on lower incomes spend a larger proportion of their income, rather than saving."

I think you might want to look at actual statistics on savings in the USA today.