Ishmael claims that the “awful truth” is that increases in the minimum wage harm the low-skilled and poor.
He cited a recent report from the Congressional Budget Office that “up to a million people could lose their jobs” if the minimum wage was increased to $10.10 an hour.
This is an extreme example of selective citation to serve an ideological agenda.
Let’s look at the Budget Office report. This nonpartisan group predicted the following effects of a hike in the minimum wage to $10.10:
- Increased weekly wages for 16.5 million workers;
- A $5 billion net increase in income for families below the poverty level;
- A $12 billion net increase in income for families between one and three times the poverty level;
- And the elevation of 900,000 persons out of poverty.
The effect on employment was likely to range from a very slight decrease to a loss of 1 million jobs.
Why did Ishmael only cite the upper limit of the predicted job loss and ignore the rest of the Congressional Budget Office analysis?
The answer is in the funding sources for the Show-Me Institute.
The view that raising the minimum wage leads to job loss is based on traditional economic theory. However, there are good reasons to question this.
In a recently released letter, 600 Ph.D. economists, including seven Nobel laureates, supported raising the minimum wage to $10.10 an hour.
They state that the “weight of evidence” is that “increases in the minimum wage have had little or no negative effect on the employment of low-wage workers.”
They further state that increasing the wage could stimulate economic growth by increasing the purchasing power of low-income consumers.
The awful truth is that at a time when corporate profits are sky high, compensation for corporate executives is escalating, and income inequality is greater than at any time in the last 80 years, it is unconscionable that there are persons in this country who work full time for wages that leave them in poverty.
Robert Blake lives in Columbia.