The Economist: A global movement toward much higher minimum wages is dangerous

From the Economist.com:

WHEN prices rise, demand falls.

Exceptions to the most basic rule of markets are curiosities—the kind of thing an economist might bore you with at a dinner party. Set carefully, minimum wages can provide such an example. But policymakers must not assume this is a cast-iron law.

Big rises in minimum wages are a gamble with people’s futures...

In America campaigners want the federal minimum wage more than doubled from today’s stingy $7.25 an hour to $15 an hour, or 77% of median hourly income...

One danger is that a high minimum wage will push some workers out of the labour force for good.

A building worker who loses his job in a recession can expect to find a new one when the economy picks up.

A cashier with few skills who, following the introduction of a high minimum wage, becomes permanently more expensive than a self-service checkout machine will have no such luck.

The British government’s defence of its new policy—that a strong economy will generate enough jobs to replace those lost to a higher minimum wage—is disingenuous: the jobs are still lost.

That is why Milton Friedman described minimum wages as a form of discrimination against the low-skilled...
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Link: http://www.economist.com/news/leaders/21659741-global-movement-toward-much-higher-minimum-wages-dangerous-reckless-wager?