The minimum wage creates jobs

In theory, minimum wages ensure workers earn decent income which they use to pay off their expenses, and what is left over is reinvested into the economy. This reinvestment translates into a greater demand for goods, which raises demand and prompts employers to create more jobs to keep up with growing demand. While some argue that the minimum wage leads to job loss when businesses cut jobs because they cannot afford to employ more at the minimum rate, proponents for minimum wage argue otherwise. Economists David Card and Alan Krueger ^[1] ran a natural experiment to test this theory in 1993, the effect of New Jersey's raising the minimum wage on employment in the fast-food sector, compared to Pennsylvania which did not raise wages. Card and Krueger found no evidence to suggest that raising wages lead to rising unemployment. On the contrary, they found that where wages rose so did employment. In 2013, economist David Cooper at the Economic Policy Institute ^[2] proposes that raising the minimum wage would trigger a pay boost which would in turn lead to an economic boost capable of spurring job creation. The minimum wage protects employees by preventing employers from setting their own pay rates which would be kept low to maximize profits. Because employers must pay employees a minimum wage which reduces business profitability, employers look for other cost-cutting measures. Proponents of the minimum argue that if a business cannot afford to pay its employees a minimum wage then the business is fundamentally flawed and should not be in operation. Jobs will be created where a business is successful. Proponents argue that where a business is viable, the minimum wage will lead to job creation because businesses will look to other channels of making ends meet, like reducing hours or non-wage benefits. Proponents of the minimum wage focus most on the employment aspect as a way to create jobs, but it is important to understand that job creation can have other economic consequences. ^[3] A common outcome is a shift from one full-time job to two part-time jobs that do not come with non-wage benefits. Therefore, while jobs may be created by the minimum wage, it does not automatically guarantee better economic outcomes on the personal or national level.

[P1] Workers earning a minimum wage will be able to make enough money to live on and reinvest excess back into the economy. [P2] Having an established minimum wage creates more market demand and in turn more demand for labour.