Analyst: Min. Wage Could be $18.85 if Tied to Productivity
August 4. 2016
A new analysis argues that the federal minimum wage would be about $10 higher if it were tied to gains made in worker productivity. (iStockphoto)
BISMARCK, N.D. – This summer marks the seven year anniversary of the last time the federal minimum wage was raised – from $6.55 to $7.25 an hour – and the buying power of those dollars has fallen by 10 percent because of inflation, according to new analysis from the Economic Policy Institute.
David Cooper, the study's author, says until the 1960s the wage was raised at roughly the same pace as increases in worker productivity.
"Had that trend continued since 1968 and we had continued to raise the minimum wage pretty regularly every year, we would have a minimum wage today of close to $19 an hour," he points out.
The Democratic Party recently added a $15-an-hour minimum wage to its platform, and Republican presidential nominee Donald Trump has also come out in favor of an increase.
According to the National Federation of Independent Business, raising the federal wage isn't possible for all businesses, especially in the South and parts of the Midwest.
Cooper's study also found that if the wage had kept pace with the average growth of typical U.S. workers' income, today's minimum wage would be almost $12 an hour.
Groups opposing initiatives in several states to pay workers at least that amount over the next few years maintain the move could lead to thousands of jobs being cut.
Cooper disagrees.
"The effect of increases in the minimum wage on employment probably is the most studied topic in all of labor economics,” he points out. “Modest increases in the minimum wage have little to no effect on employment, I mean, that debate is basically settled."
Cooper stresses raising the wage floor also helps middle class workers get paid more, and has a positive impact on local economies.
David Cooper, the study's author, says until the 1960s the wage was raised at roughly the same pace as increases in worker productivity.
"Had that trend continued since 1968 and we had continued to raise the minimum wage pretty regularly every year, we would have a minimum wage today of close to $19 an hour," he points out.
The Democratic Party recently added a $15-an-hour minimum wage to its platform, and Republican presidential nominee Donald Trump has also come out in favor of an increase.
According to the National Federation of Independent Business, raising the federal wage isn't possible for all businesses, especially in the South and parts of the Midwest.
Cooper's study also found that if the wage had kept pace with the average growth of typical U.S. workers' income, today's minimum wage would be almost $12 an hour.
Groups opposing initiatives in several states to pay workers at least that amount over the next few years maintain the move could lead to thousands of jobs being cut.
Cooper disagrees.
"The effect of increases in the minimum wage on employment probably is the most studied topic in all of labor economics,” he points out. “Modest increases in the minimum wage have little to no effect on employment, I mean, that debate is basically settled."
Cooper stresses raising the wage floor also helps middle class workers get paid more, and has a positive impact on local economies.
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