The impact of a minimum wage hike is one of the most hotly debated issues in economic research. But a growing body of evidence indicates that a Congressional proposal, backed by President Obama, to raise the minimum wage to $10.10 an hour would probably help the economy, not hurt it.
Seventy-five economists put their weight behind this argument, releasing a letter Tuesday in support of a minimum wage hike. Though some economists argue that raising the minimum wage could wind up hurting low-wage workers by discouraging employers from hiring, the economists wrote in the letter that “the weight of evidence” now shows that “increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers.”
It could also have “a small stimulative effect on the economy,” the group, which included seven Nobel laureates, wrote. If lawmakers were to raise the minimum wage from $7.25 an hour to $10.10 an hour, the economy would grow by $22 billion in the initial phase in period, according to a recent study from the Economic Policy Institute, a left-leaning think tank.