Even after weighing all the minuses against the pluses, economists say raising the minimum wage is worth the cost.
A majority of economists said the benefits to low-wage workers of raising the minimum wage outweigh the possible negatives, which include potentially making it harder for low-wage workers to find jobs, according to a recent poll from the University of Chicago’s IGM Forum.
The issue is back in the news after President Barack Obama proposed raising the minimum wage to $9 from $7.25 in his State of the Union speech earlier this month. His plan was met with skepticism from conservatives like Republican Speaker of the House John Boehner, who argue that raising the minimum wage would make employers less likely to hire, hurting job growth.
Economists haven’t found a conclusive answer as to whether raising the minimum wage hurts job seekers. The Washington Post’s Wonkblog recently noted that many studies link a higher minimum wage to higher unemployment, but there’s also research indicating that raising has no effect at all on the jobless rate.
Nobel Prize-winning economist and New York Times columnist Paul Krugman wrote in a blog post earlier this month that there “just isn’t any evidence” raising the minimum wage would hurt employment prospects. And for their part, two-thirds of job-seekers say raising the minimum wage would increase their quality of life, according to recent data from the American National Election Survey.
Even if raising the minimum wage does nothing to hurt job seekers, it could have another effect, corporate chiefs warn. Subway co-founder Fred Deluca told CNBC this week that raising the minimum wage would cause franchisees to raise prices.