It’s about time to raise the minimum wage, at least according to 600 economists.
The group, which includes seven Nobel laureates, attached their name to a letter released earlier this month by the Economic Policy Institute urging lawmakers to raise the minimum wage to $10.10 an hour. In the two weeks since the left-leaning think tank first published the letter, the list of signatories has grown from 75 to more than 600.
President Obama is expected to push for an increase in the minimum wage during his State of the Union address Tuesday. In his speech last year, Obama called on Congress to boost the federal minimum wage from $7.25 an hour to $9 an hour. Senate Democrats proposed increasing the minimum wage to $10.10 -- a measure Obama later said he backed -- but the bill is still stalled in Congress.
Whether a minimum wage increase helps or hurts low-wage workers is one of the most hotly debated topics in economic research. The EPI letter, which requires one has a Ph.D. in economics in order to sign, aims to put that debate to rest. It states that the “weight of evidence” shows that “increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.”
A minimum wage hike could also stimulate economic growth, the letter states, by putting more money in the pockets of those most likely to spend it immediately -- low-wage workers. A December EPI analysis found that raising the minimum wage to $10.10 an hour would boost the U.S. economy by $22 billion during the initial phase-in period, creating 85,000 jobs.
Of course, a minimum wage increase would most directly benefit low-wage workers, a demographic that’s become newly vocal in recent months through protests at fast food restaurants and Walmart stores across the country. Raising the minimum wage to $10.10 an hour would lift about 5 million Americans out of poverty, according to a study released earlier this month by University of Massachusetts-Amherst economist Arindrajit Dube, who signed the EPI letter.