Higher Minimum Wages: Economic Support May Not Yield Action
More than seventy economists agree: the minimum wage should be raised to $10.10 per hour. Seven Nobel Laureates are among those who signed the letter asking for the increase, which was sent to President Obama and Congressional leaders. The economists favor the hike because it has been five years since the federal rate was raised to its current $7.25 per hour level. The economists propose to increase the minimum wage by 95 cents every year for the next three years until it reaches $10.10 an hour. Afterwards, the rate should be indexed to keep it in line with inflation, the economists said.
The letter backs a proposal by Senator Tom Harkin (D-Iowa) and Representative George Miller (D-Calif.), which also sets out to establish a minimum wage of $10.10. Yearly income for minimum wage earners would increase from approximately $15,000, to about $21,000. “This policy would directly provide higher wages for close to 17 million workers by 2016,” the letter states. “Furthermore, another 11 million workers whose wages are just above the new minimum would likely see a wage increase through ‘spillover’ effects, as employers adjust their internal wage ladders.”
The letter explains that this will primarily benefits the adults of working families, especially women. “At a time when persistent high unemployment is putting enormous downward pressure on wages, such a minimum-wage increase would provide a much-needed boost to the earnings of low-wage workers.”