Idea of the Day: A Higher Minimum Wage Will Help Employees—and It Won’t Hurt Employers
The minimum-wage increase President Barack Obama proposed in his State of the Union address this week—$9 per hour by the end of 2015—should be a dog-bites-man headline. It is a no-brainer. It would directly affect the lives of millions of the lowest-wage workers—mainly poor, single mothers and workers of color in service industries such as fast food restaurants, hotels, hospitals, and nursing homes—by giving them an average wage increase of about 10 percent. A hard day’s work deserves a fair pay, and the proposed minimum-wage increase moves low-wage workers a step closer toward that reality.
Business lobbyists and conservatives, however, will quickly line up against President Obama’s proposal. The National Federation of Independent Businesses, for instance, flat out opposes any increase in the federal minimum wage, believing that “Mandatory minimum wage increases end up reducing employment levels for those people with the lowest skills.” And House Majority Whip Kevin McCarthy (R-CA) suggested on the day after the State of the Union address that the proposed minimum-wage increase would hurt job creation and thus harm the economy.
There is no evidence to support the claim that a higher minimum wage will lead to less employment. Businesses can easily absorb a higher minimum wage—with a small price increase or a small reduction in already very high profits, for example. The argument that a higher minimum wage will be a job killer simply doesn’t pass the sniff test of basic economic arithmetic, and is contradicted by reams of serious economic research.
For more on this topic, please see:
- A Higher Minimum Wage Will Not Hurt U.S. Businesses by Christian E. Weller and Nick Bunker
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