In a recently released clip from his pre-Super Bowl CBS interview, President Joe Biden acknowledged that a $15 minimum wage wouldn’t be included in the $1.9 trillion coronavirus relief package, but he announced his willingness to gradually increase the minimum wage to $15 an hour in a separate effort, claiming that “all the economics show that if you do that the whole economy rises.”
The current federal minimum wage is $7.25, and while there is widespread support for raising the minimum wage among left-leaning economists and think tanks, such support isn’t as universal as Biden suggests. In 2019, for example, the conservative think tank the Economic Policies Institute published a survey of economists on their support for a $15 minimum wage. EPI performed similar surveys in the past and found similar results—including in 2015, when the survey was performed by the University of New Hampshire Survey Center.
Critics of a higher minimum wage cite a number of reasons for their opposition: the effect on youth employment levels, the likelihood that it will increase the costs of products and services, and the chance that it will decrease the number of jobs available. Such concerns align with the data and projections published by the nonpartisan Congressional Budget Office in July 2019. The CBO estimated that while a $15 minimum wage would increase the wages of 17 million workers and reduce the number of people living below the poverty line, it would also eliminate 1.3 million jobs. The CBO’s projections also indicated a $15 minimum wage would reduce business income while causing prices to increase, concluding that “the $15 option would reduce total real (inflation-adjusted) family income in 2025 by $9 billion, or 0.1 percent.”
Given the opposition to a $15 minimum wage among economists and the projections put out by prominent organizations like the CBO, Biden is wrong to claim that “all the economics” indicate raising the minimum wage to $15 would have an overall positive effect on the economy.
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Like Thomas Sowell says the real minimum wage is zero. For those who lose their jobs.
Taken very literally, there is virtually *nothing* that one can be *sure* will "help the economy", which is itself a term that is pretty vague.
The minimum wage is a band-aid solution to the *real* problem of American workers: the decline of labor unions.
Labor unions in the United States suffered terrible criminal corruption which ultimately lead to their popular demise. This was a devastating development because it left millions of workers in the US without any sort of way to bargain for wages and benefits.
From the Conservative standpoint, there's nothing wrong with labor unions per se, as long as they are not interfered with by government intervention and not (of course) criminally corrupt.
This situation is, once again, another "fork in the road" for Conservatives where they took the *politically expedient* stance (supporting the pro-business Republican party) rather than the principled stance.
The *principled* stance with respect to unions is to oppose criminal corruption and government interference. Conservatives, on the other hand, positioned those things as *permanent features* of unions and opposed the whole idea (to the delight of Republican mega-donors).
Labor unions can provide an effective "minimum wage" for most workers that is ultimately free-market-based, but with a much closer attachment to the dynamics of the market. Doing wages one business sector at a time can provide feedback as to what works and what doesn't in terms of ultimate job creation and stability.
That said, we're bleeding, so maybe a band-aid is necessary right now. A Federal law seems very draconian to me though (lots of states are passing theirs, which is better).