Facebook Twitter

100 ECONOMISTS URGING INCREASE IN MINIMUM WAGE

SHARE 100 ECONOMISTS URGING INCREASE IN MINIMUM WAGE

More than 100 economists including three Nobel Prize winners are urging an increase in the minimum wage, saying the benefits would outweigh any negative effects.

"As economists who are concerned about the erosion in the living standards of households dependent on the earnings of low-wage workers, we believe that the federal minimum wage should be increased," they said in a statement."Specifically, the proposed increase in the minimum wage of 90 cents over a two-year period falls within the range of alternatives where the overall effects on the labor market, affected workers and the economy would be positive."

The statement was released today by the Economic Policy Institute and the Center on Budget and Policy Priorities, two liberal think tanks.

President Clinton has proposed raising the $4.25-an-hour minimum to $5.15 in two steps spread over two years. But the Republican-controlled Senate refused in July to bring the issue to a vote.

The minimum wage last was increased April 1, 1991 from $3.80 an hour.

Republicans and some economists contend that raising the minimum would price many lower-income workers out of jobs.

A Heritage Foundation study last spring said Clinton's proposal could result in the loss of as many as 677,000 jobs for teenagers and young adults.

Mark Wilson, the foundation labor economist who conducted the study, said the 90-cent increase "will destroy entry-level job opportunities for the very unskilled Americans President Clinton claims he wants to help."

But in their statement, the 101 economists disagreed. They include Nobel laureates Kenneth J. Arrow of Stanford University, Lawrence R. Klein of the University of Pennsylvania and James Tobin of Yale University.

"The evidence from recent economic studies of the effects of increases in federal and state minimum wages at the end of the 1980s and in the early 1990s - as well as updates of the traditional time-series studies - suggests that the employment effects were negligible or small," they said.

The economists contend the benefits would outweigh the negative effects.

"It has key advantages, including that it produces positive work incentives and is administratively simple," they said.

"For these and other reasons, such as its exceptionally low value today, there should be greater reliance on the minimum wage to support the earnings of low-wage workers."