Nearly Three Quarters of Economists Say $15 Minimum Wage Is Bad Idea
By Andrew Burger - The Washington Free Beacon
A congressional bill to raise the federal minimum wage from $7.25 to $15 is set for a vote in the U.S. House of Representatives. Just shy of three-quarters of economists (74 percent) say it's a bad idea, according to a survey of economists commissioned by Employment Policies Institute (EPI).
The federal minimum wage, now $7.25 per hour, hasn't been increased since 2009. With a new majority in the U.S. House, Progressive Democrats have moved a bill to the House floor.
The measure would incrementally raise the federal minimum wage to $15 by 2024. It also would phase out lower minimum wages for tipped and younger workers. A vote in the Democrat-controlled House could come sometime this month.
A large majority of economists say that raising the minimum wage to $15 an hour would result in job losses and stunt economic growth.
Supporting the bill is a persistent groundswell of grass-roots support among low-wage workers, particularly fast-food workers and members of the Service Employees of America union, SEIA. The growing list of cities that have raised, or are considering raising, minimum wages in their jurisdictions has also added momentum to progressive Democrats' push for a higher federal minimum wage in Congress. The longstanding consensus, or majority, view among economists is that raising the minimum wage, whether at the local, state or federal level, will actually reduce employment, job creation and economic growth, however.
"With Congress now considering an unprecedented increase in the minimum wage, it is essential to understand the perspectives of professionals in the economics world," EPI's Samantha Summers said. "The survey provides much-needed perspective on economists' views regarding a federal $15 minimum wage, and what effects it would have on the economy, jobs, and poverty levels."
Nearly 90 percent of EPI survey respondents said the appropriate minimum wage should be below $15 an hour. Also according to the survey:
- 84 percent believe a $15 minimum wage will have negative effects on youth employment.
- Two-thirds of economists (66 percent) believe that an appropriate federal minimum wage is $10 an hour or less.
- Just six percent believe a $15 minimum wage is a very efficient means to target individuals in poverty, while 64 percent said the same thing about the Earned Income Tax Credit (EITC).
- 16 percent said $10 an hour would be the best level for the federal minimum wage.
- Impacts of such an increase are likely to vary between urban areas, where average wages are higher, and more rural areas, where they aren't as high, Parker told Watchdog.
"There is also a big difference between a 16-year-old with no skills trying to make some extra money after school, and a 30-year-old mother working full time, trying to support her kids," Elliot Parker, a professor of economics at the University of Nevada-Reno, said.
In considering the legislation, elected officials will have to weigh how effective it will be in helping people pull themselves out of poverty with the very real likelihood that others would lose their jobs, Parker said.
"The literature is clear that past minimum wage hikes have reduced employment without effectively targeting individuals in poverty," he said. "As our survey shows, just six percent of economists believe a $15 minimum wage is a very efficient policy to address the needs for low-income families, while 64 percent believe this about expanding the Earned Income Tax Credit (EITC)."
Summers said the free market is better at helping individuals improve their livelihoods.
"If the current, robust economy tells us anything, it's that employees aren't waiting on the federal government to give them a raise," Summers said. "The number and percentage of people earning the federal minimum wage has dropped every year since 2010, and hundreds if not thousands of employers are paying starting wage rates at $15 or more. Raising the minimum wage would only eliminate pathways for additional employees to work their way up the career ladder."
If passed in the House, the proposed minimum wage hike would face a tougher test in the Republican-controlled Senate.
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