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(Timur) Almost 50% of minimum wage workers will benefit from a raise in the minimum wage to $15 and hour. Over the next 5-6 years, it is estimated that they will gain over $68 billion collectively. An estimate of 45% of medical program enrollments are minimum wage workers who then struggle to pay any other bills they have.
https://www.nelp.org/publication/raising-minimum-wage-leads-significant-gains-workers-not-benefits-cliffs/

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Evidence in Favor of 'Generous' Minimum Wages

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Evidence in Favor of 'Generous' Minimum Wages

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"firms can more easily adjust their business models to reduce the role of low-wage labour than was previously believed: by automating, perhaps, or by eliminating jobs that were not particularly necessary in the first place." "If workers can find employment only at a low wage, is society actually better for having those jobs?"
https://www.economist.com/finance-and-economics/2017/07/08/economists-argue-about-minimum-wages
This means that it is more beneficial towards the economy that the low-wage workers are unable to be hired as if firms choose to switch to machinery and equipment instead, it may reduce their costs in the long run, leading to increased gains from trade.
(Authencia)

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In 1992, 79% members of the American Economic Association agreed that minimum wage increases unemployment, especially among young and low-skilled workers. Despite this majority of American economists seemingly not being in favour of minimum wage, they all agree that having it implemented is better than having no set pay at all, with workers being forced to live off tips or nothing at all being a far more negative outcome to this issue. (Henry)
https://www.economist.com/schools-brief/2020/08/13/what-harm-do-minimum-wages-do

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Evidence supporting the abolition of Minimum Wages

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Evidence supporting the abolition of Minimum Wages

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Economists have discovered that providing a more generous minimum wage to workers results in this extra cost being passed onto the consumer. The price of products will increase so that the consumers, not the businesses, bear the burden of this extra cost. Since wealthier people tend to spend less on products associated with minimum wage workers, these minimum wages essentially raise prices on the poor. (Henry)

heritage.org/jobs-and-labor/report/15-minimum-wages-will-substantially-raise-prices#:~:text=Economists%20find%20that%20businesses%20pass,prices%20more%20on%20the%20poor.

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"When minimum wage rates increase, so do prices firms and indisutries like retail, restaurant, and fast-food. A fast-food place will earn anywhere from 2 to 6 cents of profit on each dollar of sales - something has to give, so that $4 burger increases to $5.50."
- As the minimum wages increase so do the prices of goods and services which affects the consumers effective demand. Since firms that are hiring minimum wage employees are small firms they have thin profit margins meaning they have to give the higher expenses to the consumers. (Emma)

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The minimum wage hurts the very people it seeks to help, as the minimum wage states that if you are a worker if you can not convince the employer to pay you the given minimum wage you can not accept that job, thus limiting job opportunities for low skill work. An example of this can be seen in American Samoa. Rather than causing wages to rise, minimum wage laws simply set the minimal level of productivity a worker must contribute to legally be allowed to work. In the case of American Samoa, tuna canners simply could not deliver $7.25 cents per hour of productivity, so their jobs were eliminated. Rather than being employed at $3.26 per hour. This not only lead to a massive spike in unemployment shaking the samoan economy, the states also lost 50% of canned tuna which negatively influenced domestic consumers as the price for tuna shot up due to shortages in supply.

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The federal minimum wage is a blunt instrument. It cannot take into account geographical differences in productivity, economic conditions, or the bargaining power of workers.

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Although the federal minimum wage is $7.25, with it also being this in Texas, the minimum wage varies depending on the state. For example, in Illinois the minimum wage is $8.25, $11.80 in New York State and $12.00 in California. The state with the highest minimum wage is Washington State, with $13.00. (Henry)

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In 2017, 80.4 million workers age 16 and older in the United States were paid at hourly rates, representing 58.3 percent of all wage and salary workers. Among those paid by the hour, 542,000 workers earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.3 million had wages below the federal minimum. Together, these 1.8 million workers with wages at or below the federal minimum made up 2.3 percent of all hourly paid workers.

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Though the federal minimum wage has gone up from $1 in 1960 to $7.25 in 2009, if we adjust the values for inflation, the minimum wage now is lower than it was in 1960. Every time a new minimum wage is set by the Congress, it is dragged back down by inflation.

Main issue is that there is no consistent system of setting the minimum wage: from 1997 to 2007 it was $5.15 for 10 years, and in 2 years it has increased by 40% to be set to $7.25 in 2009. This creates difficulties for the businesses as they have to make choices to accommodate such a drastic change.

Countries, such as France, that have minimum wages that have risen over time, usually conduct regular meetings of economic officials where they adjust the minimum wage based on average income and inflation.

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Minimum wages in the US (federal versus average wages)

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Minimum wages in the US (federal versus average wages)

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Between 1998 and 2006 the federal minimum stayed constant at $5.15 per hour, while average wages grew by around 30%. What is unusual about the last decade is that another force is also causing the federal pay floor to be left behind: state and local governments. According to the University of California Berkeley’s Labour Centre 44 cities and counties apply their own minimum wages today, compared to just five before 2012. At the start of 2019, 20 states raised their pay floors - the state and city governments are becoming much more assertive

The share of hours worked at minimum pay—either federal, state or local, and excluding tipped or salaried workers—fell, from 5% in 1998 to a little over 2%. But since 2009, despite wage growth and a flat federal minimum, the share of hours worked at some minimum wage has stayed constant, at around 5%

In 2010 state and local minimum wages were binding for around 40% of hours worked at some pay floor. In 2019 that share is fully 91%.

Rich cities have raised their minimum wages dramatically, their minimum-wage workers have, as a group, been climbing up the nation’s income distribution. The average pay of minimum-wage workers—a group which now varies a lot by place—has risen to 57% of the national median wage, Mr Tedeschi finds. That is up sharply from between 39% and 44% for the entire period between 1994 and 2015 - Democrats want to restore the prominence of the federal minimum wage, by boosting it to $15 and/or want the federal minimum wage to vary regionally with the cost of living. Republican scepticism of government meddling on the other hand makes it likely that the federal minimum wage will be left to wither for a few more years.

America's federal minimum wage is fixed in cash terms, meaning it bites hardest whenever Congress raises it, then declines in relevance as earnings grow.

If minimum wages were to increase, there will be more money entry-level employees and with that  they will spend more, which is good for the economy as a whole. There will also be less reliance on public assistance, consumers may enjoy better quality services and possibly goods as workers are more incentivized to work and be productive. In order to support higher labor costs, firms will need to raise prices, thus raising the cost of living, negating some of the effects of the wage hikes. Some businesses that cannot afford the higher wages may lay off some employees or reduce hours for those they retain, negating the benefits of a higher hourly wage. Small businesses might have to close..

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State of California
In California, 33% of workers have at least a Bachelor's degree, but of those making minimum wage, only 13% are college graduates. On the other hand, 52% of all workers affected by minimum wage never went to college, even though that group makes up 34% of California's working population.

The initiatives are expected to most impact younger people, racial minorities, and those with less education. Berkeley says that 55% of Californians affected by increasing minimum wage to $15 will be Latino.

(Finlay)

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Higher Minimum Wages.

Seattle: $15.45.

San Francisco: $15.00.

San Jose: $15.25 Per Hour.

New York City: $15.00.

Washington, D.C.: $15.00.

The highest percentages of hourly paid workers earning at or below the minimum wage were in the South:
South Carolina (about 5 percent), Louisiana (about 5 percent), and Mississippi (4 percent)
(Emma)

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TOK Focus: How can we know when statistical evidence is useful in solving an economic problem?

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TOK Focus: How can we know when statistical evidence is useful in solving an economic problem?

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How can we know when to use statistical evidence and whether it is useful

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How can we know when to use statistical evidence and whether it is useful

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(TImur) The significance of the statistics depends on how robust and reliable it is. If you have different statistics leading to the same conclusion, the evidence may become useful in spotting patterns as it is unlikely for it to be a simple coincidence. However, correlation can be mistaken for causation which takes away the significance of the data sets as it is simple a dependency on one another.

Summary:

1)  In evaluating any study try to take into account the amount of background noise.  That is, remember that the more hypotheses which are tested and the less selection which goes into choosing hypotheses the more likely it is that you are looking at noise.

2) Bigger samples are better.  (But note that even big samples won’t help to solve the problems of observational studies which is a whole other problem).

3) Small effects are to be distrusted.

4) Multiple sources and types of evidence are desirable.

5) Evaluate literatures not individual papers.

6)  Trust empirical papers which test other people’s theories more than empirical papers which test the author’s theory.