I should have mentioned that the numbers in the minimum wage scenario are just for illustration and should not be taken as reliable. I’ve updated the post to say that. But here is where I got the numbers that I used in the illustration.
According to the BLS, there were just under 2 million workers who earned the minimum wage or less in 2005. But the number of workers who earn less than $7.25 was just a rough guess. According to this December 2005 report from the Center for Economic and Policy Research, a group that supports an increase in the minimum wage, about 7 million workers would get a raise if the minimum wage were increased to $7.25 an hour. So I used that figure, assuming it would be an upper bound. But someone has just emailed me suggesting that according to the BLS, that number should be 11 million. I’ll resolve this apparent discrepancy. Finally, most studies suggest that a 10% increase in the minimum wage causes a 1-3% decrease in employment. So a 40% increase in the minimum wage from $5.15 to $7.25 would cause a 4-12% decrease in employment (using the crude assumption that the effects are linear) or a loss of between 280,000 and 840,000 jobs. I used one million just so we wouldn’t need a fraction of a stick figure if each stick figure represented a million jobs. The bottom line is that you shouldn’t quote these figures as "facts."