ANOTHER VIEWPOINT: A case for raising the minimum wage

<p>The New York Times</p><p>Opponents of minimum-wage laws have long argued that companies have only so much money and, if required to pay higher wages, they will employ fewer workers.</p><p>Now, there is evidence that such concerns, never entirely sincere, are greatly overstated.</p><p>Over the past five years, a wave of increases in state and local minimum-wage standards has pushed the average effective minimum wage in the United States to the highest level on record. The average worker must be paid at least $11.80 an hour.</p><p>And even as wages have marched upward, job growth remains strong.</p><p>The interventions by some state and local governments, however, do not obviate the need for federal action. To the contrary. Millions of workers are being left behind because 21 states — including Indiana — still use the federal standard, $7.25 an hour, which has not risen since 2009.</p><p>The time has come to increase the federal minimum.</p><p>House Democrats passed legislation in July that would gradually increase the federal standard, to $15 an hour in 2025, and most of the Democrats running for president have endorsed the legislation. The Congressional Budget Office estimated a $15 minimum wage would raise the pay of at least 17 million workers.</p><p>The simplistic view that minimum-wage laws cause unemployment commanded a broad consensus in the 1980s. The old critique is still put forward regularly by the restaurant industry and other major employers of low-wage workers.</p><p>But evidence that any such effects are relatively small has been piling up for several decades. A groundbreaking study published in 1993 by the economists David Card and Alan Krueger examined a minimum-wage rise in New Jersey by comparing fast-food restaurants there and in an adjacent part of Pennsylvania. It found no impact on employment.</p><p>This prompted other economists to test the standard theory. This year, the British government asked the economist Arindrajit Dube to review the results accumulated over the last quarter-century. Dube reported the sum total of the research showed minimum-wage increases raised compensation while producing a “very muted effect” on employment.</p><p>Then, consider the situation along the New York-Pennsylvania border. New York State has been raising its minimum wage since 2016. It’s now $11.80 outside New York City. Pennsylvania, meanwhile, is among the 21 states where the $7.25 minimum remains in force. In September, researchers at the Federal Reserve Bank of New York found that wages have climbed significantly in counties along the New York side of the state line, again without a discernible difference in the pace of employment growth.</p><p>More than doubling the current federal standard would be a significant change, and it is not without risk. It is possible that a national $15 standard would produce the kinds of damage critics have long predicted. One simple corrective, proposed by Sen. Michael Bennet of Colorado, would be to include exemptions from the $15 standard for low-wage metropolitan areas and rural areas.</p><p>But the successful increases in minimum-wage standards across a diverse range of states and cities suggest the broader risk is worth taking. The American economy is generating plenty of jobs; the problem is in the paychecks. The solution is a $15 federal minimum wage.</p>