Welcome back podcast listeners. I'm Anastasia Yuglova. Today is Monday January 29th.

After a brief I carry on flight in the new Congress, the Democrats proposed minimum wage hike from 515

to 725 an hour went down in flames last week.

Senate Republicans blocked the legislation by insisting that it include new tax breaks for

restaurants and other businesses that rely on minimum wage workers.

The debate over the minimum wage looks, at least for the moment, completely deadlocked, but

while lawmakers duke it out in Congress, today's guest Cato Senior Fellow Peter Van Doren explains why,

surprise, a minimum wage increase would hurt the very same workers it professes to help.

Tell me what economists already know.

What is in the literature about how wage floors affect unemployment?

The best work in this is done by David Newmark, who's a professor of University of California Irvine, and his work suggests

the following that among the affected people in the minimum wage population, that is those people

whose wages are now currently at or

above the current minimum but are below the proposed minimum for that set of people for every percentage increase in the minimum wage and

that would be from 515 to something like 7 so that's what an almost 20% increase

there would be a 1 to 2 tenths of a percent decrease in their

aggregate employment. So whatever that population is and we actually don't know

precisely how many people are involved, their aggregate employment

would go down as the result of this and or their hours would be reduced or some combination

of those two things.

Second, even though the aggregate employment goes down,

it's possible if the data are in certain fashion

...