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Policy Debates
Policy Debates

There is an ongoing debate surrounding the minimum wage, and politicians, workers, and economists have differing views on the subject.

Proponents of raising the minimum wage argue that it would improve the lives of low-wage workers and boost economic growth by increasing consumer purchasing power.

The Obama Administration has expressed support for raising the minimum wage. In his 2015 State of the Union Address, President Obama criticized members of Congress who refused to vote to raise the minimum wage. He made a suggestion: attempt to “work full time and support a family” while earning the current minimum wage; otherwise, “give millions of the hardest-working people in America a raise” by voting to raise the minimum wage. The President went on to assert that, among other things, a higher minimum wage would “make a meaningful difference in the lives of millions of families.”

Other Democrats have expressed similar support for a higher minimum wage. Former Secretary of State Hillary Clinton supports it as part of an effort to end “quarterly capitalism,” in which businesses focus on quarterly profits instead of long term growth and a healthy middle class. U.S. Senator Bernie Sanders supports it because, in his view, current wages are “totally inadequate” and amount to “starvation pay.”

Workers currently receiving minimum wage express similar views. In November of 2014, employees of Wal-Mart, the nation’s largest employer, protested for high wages. One of these protests outside of a Los Angeles Wal-Mart led to 23 arrests. In December 2014, workers staged protests in 160 U.S. cities at fast food restaurants and airports such as John F. Kennedy International Airport in New York City. Many of these protests have been organized by Fight for $15, a nationwide movement that demands higher pay for low-wage workers in an effort reduce economic inequality and restore economic growth.

Republicans have consistently opposed a minimum wage increase, arguing that it would cost jobs. Former Speaker of the House John Boehner said that it is a “bad idea” because businesses would cut low-wage jobs in order to offset the increased wage costs. Former Florida Governor Jeb Bush sees “no need” for an increased minimum wage. New Jersey Governor Chris Christie believes that it would “destroy jobs,” and U.S. Senator Ted Cruz notes that those jobs would be taken from the “most vulnerable.”

Business interests groups similarly oppose a minimum wage increase. In November 2015, Neal Lesher of the National Federation of Independent Business argued that “Raising the minimum wage makes a great sound-bite but it hurts exactly the workers whom the advocates pretend to be helping.” In April 2014, the National Retail Federation sent a letter to the U.S. Senate urging lawmakers to oppose a minimum wage increase, since such a measure would “undermine the job prospects for less skilled and part-time workers.”

Economists differ in their views on the effects of raising the minimum wage. According to a survey conducted by the Chicago Booth School of Business Initiative on Global Markets, economists disagree about the effects of a minimum wage increase on unemployment. Of the participating experts, 34% agreed that increasing the minimum wage would make it harder for low-wage workers to find jobs; 32% disagreed, and 24% were uncertain. Moreover, a Congressional Budget Office study inconclusively found that a minimum wage increase would push some family’s income above the poverty line, but that, at the same time, it would “eliminate” some jobs.