Economists Shoot-down Boehner’s Minimum Wage Claim


raise minimum wageBoth times in fairly recent years federal minimum wage was increased with the cooperation of Republican leadership. In 1996, the Republican-controlled House under Newt Gingrich, the minimum wage was raised from $4.25 to $5.15 over a 2 year period. The next wage increase took place a decade later, in 2006-2007, when Democrats won back control of the House. They found support for the increase in then President, George W. Bush. This instance raised the minimum rate to its current level of $7.25 per hour.

President Obama in his State of the Union address proposed a 2 year, incremental increase of $1.75 to $9.00 an hour by 2015. This proposal comes with the realization that many of the nation’s poorest individuals and families struggle to exist even with full-time jobs. Despite this, Speaker Boehner expressed his opposition to the minimum wage increase reasoning that,

When you raise the price of employment, guess what happens? You get less of it. Listen, I’ve got 11 brothers and sisters on every rung of the economic ladder. I  know about this issue as much as anybody in this town. What happens when you  take away the first couple of rungs on the economic ladder, you make it harder  for people to get on the ladder.”
 

These comment mirror those he made in 2007 when he voted argued and voted against the increase at that time. While his reasoning is based in general economic theory, they are not supported by the on the ground realities. Unfortunately for the Speaker his assertions are coming under attack from many economists and economic studies.

A 1998 study performed by the Economic Policy Institute investigating the economic impacts of the 1996 rate increase found,

These empirical results, particularly those showing strong wage gains and no negative impact on job opportunities, are at odds with traditional economic theory, which argues that a rise in the minimum wage must cost jobs.”

Another study, by economists David Carr and Alan Kreuger, comparing the impacts of a minimum wage increase in New Jersey and Pennsylvania where no increase took place, “…found that New Jersey’s minimum wage hike didn’t negatively affect employment — in fact, they found, employment increased”

Multiple other studies as reported by Atlantic Wire have found raising minimum wage in actuality it does not cost jobs, it reduces income inequality and tends to help the economy.

So once again it seems the current Speaker and the current congressional Republican membership find themselves standing firm against well researched, credible findings from numerous sources. As is the case with research from other areas from health care to climate change the current Republican leadership consistently turns its head, denouncing factual evidence that does not fall in line with the ideology by which they are led. For the sake of the country’s health, one must wonder what it will take for these leaders to change or when voters will seek out those who are more willing to listen.

 

Additional Reading:

Why Does the Minimum Wage Have No Discernible Effect on Employment?

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12 Comments to “Economists Shoot-down Boehner’s Minimum Wage Claim”

  1. This is a very good article. I am going to reblog and hope you won’t mind. Blessings, Barbara

  2. Reblogged this on idealisticrebel and commented:
    Minimum wage provides the working poor a fighting chance for a decent life.

  3. Reblogged this on The ObamaCrat.Com™ and commented:
    Everything the TeaTardedRepubliCANTS say, think, believe and know is shot down by just about anyone with 3 working brain cells. Thank you Mashed Potato Bulletin, for this post.

  4. I agree 5000%. Go out and enjoy your weekend. 😯

  5. Give people more income and they will spend it. And when more people buy things what does that do?
    It creates jobs, jobs that pay more, jobs that bring in revenue to the Government, jobs that will reduce unemployment and begin to reduce the number of peoiple needing welfare and food stamps.
    But no. Lets cut taxes for the ‘job creators’.

    • That’s exactly it, bottom up/demand side economics is the more real world accurate model. It’s proven to be that way time and time again. It wasn’t until Reagan that supply-side gained believers who just can’t let go of it and read the facts.

  6. The empirical studies are mixed. Traditional theory would mostly support being cautious with the minimum wage. I’d argue this tool should be used sparingly.

    • Sure, caution is warranted. It seems the findings, either way they go, illustrate farily small impacts, positive or negative. I think the caution should be on the amount of the increase and the length of time it’s implemented. $1.75 over 2 – 2 1/2 years shouldn’t be all that bad especially given the predictions of economic growth towards the end of this year and on through 2014.
      I say it’s also worth considering the social benefits to those wage earners who receive those increases.

      That’s just my take.

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