Underpaying Employees Can Hurt a Company’s Bottom Line

Image: Time

Posted by Libergirl

TIME

Just this week, Seattle workers won a significant battle when the city raised its minimum wage to $15 an hour. Richmond, Calif, recently voted to hike theirs to $13 by 2018, while polls indicate San Francisco voters favor a $15 minimum. Even the CEO of McDonalds is somewhere between neutral and positive on raising the minimum wage.

People continue to argue that increasing the price of labor will reduce the number of jobs. However, the oft-cited study in the fast-food industry by economists David Card and Alan Krueger show small to no negative employment effects. And a comprehensive study of minimum wages in European countries concludes that there is “no general evidence that minimum wages reduced employment.” But even if higher minimum wages do cost jobs, should U.S. policymakers care? Maybe not.

Contrary to what you may think, the U.S. is actually a comparatively low-wage country. According to…

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