Raise the Minimum Wage

A study by University of Massachusetts-Amherst economist Arindrajit Dube finds that raising the federal minimum wage from $7.25 per hour to $10.10 per hour would directly bring 4.6 million people out of poverty.  Dube calls such a raise a moderate impact and notes that programs such as the Earned Income Tax Credit and SNAP are actually more effective at reducing poverty.

Update (January 23):  Lynn Stuart Parramore lists 11 jobs that pay poverty wages.

Update (January 25):  Lack of pay goes hand-in-hand with lack of paid leave for struggling American workers.  David Sirota reports on the implementation of mandated paid sick days in Connecticut.  It turns out that the benefits of sick leave outweigh the costs.  Not to mention being the humane thing to do.

Update (February 9):  A New York Times editorial endorses a higher minimum wage.  The editorial cites research showing almost no employment effect from a higher minimum wage.  In fact, it's reasonable to presume that when lower income people have more money to spend, that actually helps stimulate job growth.

Update (February 20):  As the Congressional Budget Office releases an estimate that a minimum wage of $10.10 per hour could cost 500,000 jobs, Brian Beutler points out that any economic policy has positive and negative impacts.  The CBO also estimates that 900,000 people would be brought out of poverty and that 16.5 million people would see higher wages.

Update (March 4):  Mike Konczal has 7 Bipartisan Reasons to Raise the Minimum Wage.

Update (September 6):  A report on strikes by fast-food workers, and Michael Lind discusses solving the "welfare" debate by raising everyone's earned income.

Update (January 15, 2016):  A study from Cornell University finds that increasing the minimum wage does not decrease employment in the restaurant industry.

Update (April 27, 2016):  A study from the University of Washington finds "little or no evidence of price increases" following implementation of Seattle's minimum wage law.

Update (February 11, 2018):  There is evidence that raising minimum wages does not decrease the number of jobs.

Update (February 27, 2021):  Richard Wolff says there is a fake debate.

Paying a decent living wage to workers by raising the minimum wage need not threaten the viability of small businesses. The latter need not collapse nor fire workers when minimum wages are raised. Indeed, raising the minimum wage can and should be one basis for a mutually beneficial alliance between wage workers and small businesses.

How then might a civilized society raise its minimum wage to provide a decent livelihood to workers and protect its small businesses? The solution is straightforward. Offset the extra labor costs for small businesses from a higher minimum wage by providing them with some combination of the following: a new and significant share of government orders, tax breaks, and government subsidies. Such supports now overwhelmingly favor big business and thereby facilitate its many efforts to destroy and replace small businesses.

In effect, this proposal changes the terrain of the minimum wage debate. It brings into stark relief that raising the minimum wage leaves open the question of which part of the employer class will bear the burden of compensating for that in the short run.