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Minimum wage push renews free-lunch debate

While low-wage workers would benefit from a pay raise, some say the trade-off could be fewer jobs, shorter workweeks and less incentive to acquire skills and get better positions.

By Lorraine Woellert, Victoria Stilwell | Updated on January 30, 2014
Fast-food workers held protests across the country last year in hopes of seeing an increase in the minimum wage. (Photo: AP)

Jan. 30 (Bloomberg) — The debate over President Barack Obama’s proposal to raise the minimum wage turns on the credibility of an economic tenet popularized by Milton Friedman: “There’s no such thing as a free lunch.”

Since states began raising their wage floors two decades ago, economists have focused on the patchwork of laws in a debate about the impact — or lack thereof. Some studies argue that moderate increases have little or no ill effects on hiring and therefore will boost household income and spending. Others call the laws job killers that hurt unskilled and low-paid workers, the very people they’re meant to help.

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