In an article on Chicago Tribune online edition, author Rex Huppke argues that increasing minimum wage will be overall good for the economy. Huppke quotes David Cooper of Economic Policy Institute who says that the level of economic growth and technological progress in the U.S. should have resulted in greater growth in minimum wage than it is now so that the benefits would be reaped by workers, too and not just business owners. Some economists claim the real wage has actually declined and expanded income inequality because rise in minimum wage has lagged behind the inflation rates. According to Cooper, real wage today is 23 percent less than the level in 1968 when it was $9.40. The Congressional Budget Office estimates that increasing minimum wage to $10.10 per hour would boost the earnings of 16.5 million workers and lift 900,000 out of poverty (Huppke).
The opponents of increasing minimum wage argue that higher minimum wage levels would result in lower employment levels as well as higher prices of goods and services. But research by Economist Michael Reich of the University of California at Berkeley and some other economists reveal that increasing minimum wage doesn’t hurt employment levels and may actually save businesses costs through lower labor turnover. Reich also found that the increase in minimum wage would result in only 1 percent rise in prices of goods and services which is barely significant and the impact on prices would be even lower in some industries like retail. A survey of three dozen top economists by University of Chicago’s Booth School of Business revealed that 47 percent support raising minimum wage level, 11 percent oppose it, and 35 percent are neutral (Huppke).
- Huppke, Rex. The argument for increasing minimum wage. 3 March 2014. 24 March 2014