[Related to the Apply the Concept on page 119] An
article in the Wall Street Journal noted that a study by the
U.S. Congressional Budget Office “estimated raising the
minimum wage to $10.10 an hour would reduce U.S.
employment by 500,000 but lift 900,000 Americans out of
poverty.” Why might raising the minimum wage reduce
employment? How would it raise some people out of poverty? What effect might these estimates have on a normative
analysis of the minimum wage?
Source: Julie Jargon and Eric Morath, “As Wage Debate Rages, Some
Have Made the Shift,” Wall Street Journal, April 8, 2014.