Minimum-wage debate rages on
|By Gregory Karp, Chicago Tribune|
|McClatchy-Tribune Information Services|
But the rhetoric rages on after President
It's a job killer.
It's a poverty fighter.
"It's probably the most studied social policy in American history," said
Yet debate continues, this time against the backdrop of a fragile economy, which has employers reluctant to add costs. Meanwhile, the same forces pinching business are also squeezing workers at the lowest rung of the income ladder who haven't seen an increase in their hourly wage since 2009 as the top 1 percent accumulated more wealth.
Bruno, who supports raising the minimum wage, called wrangling over the virtues of raising the minimum wage "a foolish endeavor."
"It's good for minimum-wage workers; it's good for other workers; it's good for the economy; it isn't a drag on employers," he contends. "There is no research that has ever identified a negative job impact from raising the minimum wage."
However, that's in the aggregate. Some studies have shown a reduction in the number of entry-level jobs that might otherwise have been created if not for a minimum-wage increase, Bruno said.
"That's mitigated by the fact that raising the minimum wage generates so much more economic activity that, at the end of the day, it creates more total jobs," Bruno said. "I would argue there isn't really any serious disagreement over the impact of a modest, phased-in minimum-wage increase."
He conceded those views are for the typical slow and modest increase in the minimum wage, not a sudden doubling of it to
Studies also have shown that a higher minimum wage, first enacted in 1938 as a component of President
But opponents of raising the minimum wage point to basic economic theory. If you raise the price of something, such as labor, demand for the product or service will decrease. Thus, higher wages mean fewer jobs.
Indeed, a rise in the minimum wage results in reduced employment among low-wage workers, concludes a 2007 review of existing minimum-wage research by
Dueling studies aside, sometimes it's just bad timing for a rise in the minimum wage, said
"What I'm hearing from my members is they're scared this time around because
She said "piling on a large wage increase" could lead business owners to close their doors or reduce payrolls.
Typically, the argument by businesses against minimum-wage increases is more philosophical -- that government shouldn't be weighing in on wages in the private sector, she said.
"This time around, it is a lot more dire," Maisch said. "It's really more about the bottom line for many of these small employers."
Business owners are also dealing with the relatively high costs of doing business in
But raising the minimum wage could create more of those dollars because workers will have more money to spend, creating a stimulating effect as those dollars spread through the economy, supporters say.
They point to a 2011 study by the
A worker earning today's national minimum wage earns about
Supporters also argue that today's low minimum wage amounts to corporate subsidies from taxpayers. Because workers cannot survive on the minimum wage, they qualify for government welfare services, such as food stamps. So, instead of paying a livable wage, businesses rely on the government to make up the difference so those workers can survive, essentially forcing taxpayers to subsidize their payrolls.
Still others argue that the debate doesn't even matter that much. While 3.6 million Americans earned the federal minimum wage or less in 2012, that's just 4.7 percent of all hourly workers, according to the
But Bruno said there is a ripple effect among wages, so those working slightly above the minimum wage get increases and benefit too. "If you increase the wage floor, you don't only help those people at minimum wage," he said.
As the arguments on each side continue, fundamentally the minimum wage is a government regulation that attempts to fix a perceived inefficiency in the market by redistributing some wealth.
"The question is, is that good or bad?" Bruno said.
(c)2014 the Chicago Tribune
Visit the Chicago Tribune at www.chicagotribune.com
Distributed by MCT Information Services