Hard work deserves fair pay
Hundreds of Economists Say: Raise the Minimum Wage
The minimum wage has been an important part of our nation's economy for 68 years. It is based on the principle of valuing work by establishing an hourly wage floor beneath which employers cannot pay their workers. In so doing, the minimum wage helps to equalize the imbalance in bargaining power that low-wage workers face in the labor market. The minimum wage is also an important tool in fighting poverty.
The value of the 1997 increase in the federal minimum wage has been fully eroded. The real value of today's federal minimum wage is less than it has been since 1951. Moreover, the ratio of the minimum wage to the average hourly wage of non-supervisory workers is 31%, its lowest level since World War II. This decline is causing hardship for low-wage workers and their families. We believe that a modest increase in the minimum wage would improve the well-being of low-wage workers and would not have the adverse effects that critics have claimed. In particular, we share the view the Council of Economic Advisors expressed in the 1999 Economic Report of the President that "the weight of the evidence suggests that modest increases in the minimum wage have had very little or no effect on employment." While controversy about the precise employment effects of the minimum wage continues, research has shown that most of the beneficiaries are adults, most are female, and the vast majority are members of low-income working families.
As economists who are concerned about the problems facing low-wage workers, we believe the Fair Minimum Wage Act of 2005's proposed phased-in increase in the federal minimum wage to $7.25 falls well within the range of options where the benefits to the labor market, workers, and the overall economy would be positive.
Twenty-two states and the District of Columbia have set their minimum wages above the federal level. Arizona, Colorado, Missouri, Montana, Nevada and Ohio, are considering similar measures. As with a federal increase, modest increases in state minimum wages in the range of $1.00 to $2.50 and indexing to protect against inflation can significantly improve the lives of low-income workers and their families, without the adverse effects that critics have claimed.
Economists Supporting Increase in Minimum Wage
Leading economists endorse this statement
Henry Aaron The Brookings Institution
Lawrence Katz Harvard University (AEA Executive Committee)
Kenneth Arrow*+ Stanford University
Lawrence Klein*+ University of Pennsylvania
William Baumol+ Princeton University and New York University
Frank Levy Massachusetts Institute of Technology
Rebecca Blank University of Michigan
Lawrence Mishel Economic Policy Institute
Alan Blinder Princeton University
Alice Rivlin+ The Brookings Institution (former Vice Chair of the
Peter Diamond+ Massachusetts Institute of Technology
Federal Reserve and Director of the Office of Management and Budget)
Ronald Ehrenberg, Cornell University
Robert Solow*+ Massachusetts Institute of Technology
Clive Granger* University of California, San Diego
Joseph Stiglitz* Columbia University
* Nobel Laureate + Past president, American Economics Association
Affiliations are for identification only and should not be construed as official endorsement by the listed institutions.
650 of their fellow economists agree
For more information, visit epi.org/minwage or contact the Economic Policy Institute at 202/775-8810.
* Katherine G. Abraham University of Maryland * Frank Ackerman Tufts University * F. Gerard Adams Northeastern University * Randy Albelda University of Massachusetts - Boston * James Albrecht Georgetown University * Jennifer Alix-Garcia University of Montana * Sylvia A. Allegretto Economic Policy Institute * Beth Almeida International Association of Machinists and Aerospace Workers * Abbas Alnasrawi University of Vermont * Gar Alperovitz University of Maryland - College Park * Joseph Altonji Yale University * Nurul Aman University of Massachusetts - Boston * Teresa L. Amott Hobart and William Smith Colleges * Alice Amsden Massachusetts Institute of Technology * Bernard E. Anderson University of Pennsylvania * Robert M. Anderson University of California - Berkeley * Bahreinian Aniss California State University - Sacramento * Kate Antonovics University of California - San Diego * Eileen Appelbaum Rutgers University * David D. Arsen Michigan State University * Michael Ash University of Massachusetts - Amherst * Glen Atkinson University of Nevada - Reno * Rose-Marie Avin University of Wisconsin - Eau Claire * M.V. Lee Badgett University of Massachusetts - Amherst * Aniss Bahreinian Sacramento City College * Ron Baiman Loyola University Chicago * Asatar Bair City College of San Francisco * Katie Baird University of Washington - Tacoma * Dean Baker Center for Economic and Policy Research * Radhika Balakrishnan Marymount Manhattan College * Stephen E. Baldwin KRA Corporation * Erol Balkan Hamilton College * Jennifer Ball Washburn University * Brad Barham University of Wisconsin - Madison * Drucilla K. Barker Hollins College * David Barkin Universidad Autonoma Metropolitana * James N. Baron Yale University * Chuck Barone Dickinson College * Christopher B. Barrett Cornell University * Richard Barrett University of Montana * Laurie J. Bassi McBassi & Company * Francis M. Bator Harvard University * Rosemary Batt Cornell University * Sandy Baum Skidmore College * Amanda Bayer Swarthmore College * Sohrab Behdad Denison University * Peter F. Bell State University of New York - Purchase * Dale L. Belman Michigan State University * Michael Belzer Wayne State University * Lourdes Beneria Cornell University * Barbara R. Bergmann American University and University of Maryland * Eli Berman University of California - San Diego * Alexandra Bernasek Colorado State University * Jared Bernstein Economic Policy Institute * Michael Bernstein University of California - San Diego * Charles L. Betsey Howard University * David M. Betson University of Notre Dame * Carole Biewener Simmons College * Sherrilyn Billger Illinois State University * Richard E. Bilsborrow University of North Carolina - Chapel Hill * Cyrus Bina University of Minnesota - Morris * Melissa Binder University of New Mexico * L. Josh Bivens Economic Policy Institute * Stanley Black University of North Carolina - Chapel Hill * Ron Blackwell AFL - CIO * Margaret Blair Vanderbilt University Law School * Gail Blattenberger University of Utah * Robert A. Blecker American University * Barry Bluestone Northeastern University * Peter Bohmer Evergreen State College * David Boldt State University of West Georgia * Roger E. Bolton Williams College * James F. Booker Siena College * Jeff Bookwalter University of Montana * Barry Bosworth The Brookings Institution * Heather Boushey Center for Economic and Policy Research * Roger Even Bove West Chester University * Samuel Bowles Santa Fe Institute * James K. Boyce University of Massachusetts - Amherst * Ralph Bradburd Williams College * Michael E. Bradley University of Maryland - Baltimore County * Elissa Braunstein Colorado State University * David Breneman University of Virginia * Mark Brenner Labor Notes Magazine * Vernon M. Briggs Cornell University * Byron W. 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