As Christina D. Romer wrote in a column on Sunday, there is some disagreement among economists about the prudence of raising the minimum wage. The Initiative on Global Markets at the University of Chicago’s Booth School of Business recently queried a panel of 38 economic experts on the subject, and the responses were mixed, particularly about the effect on low-skilled job seekers. (Nancy Folbre mentioned this survey in passing in her weekly post; here are the fuller findings.)
These were the responses to the first question, which dealt with whether raising the minimum wage would make it more difficult for low-skilled workers to find jobs.
As you can see, of those who responded, about a quarter said they were “uncertain” about the proposition. Exactly zero percent said they either agreed or disagreed “strongly.”
It’s no wonder there’s so much expert uncertainty on this question, given the contentious and tangled literature on the subject. Twenty years ago, a groundbreaking study by Alan Krueger (now chairman of President Obama’s Council of Economic Advisers) and David Card was the first to use empirical data to study an increase in the minimum wage. It found that raising the wage did not reduce employment. Repeat studies since then have had more mixed results, and some have shown negative, though generally small, employment effects.
Ask economists about whether raising the minimum wage is worth the potential risks to low-skilled workers, though, and the responses tend to be much more favorable to a minimum-wage increase:
Nearly half of the panelists agreed or strongly agreed that the benefits of raising the minimum wage and indexing it to inflation outweighed the costs. In the comments section, several of the economists mentioned that other policies, like the earned income tax credit, might be better suited to addressing the needs of low-income workers. Professor Romer had mentioned this in her column, as well.
These responses do not necessarily reflect the beliefs of all economists, the way a traditional poll might aim to be; rather, the panelists are among the more elite members of their profession and were selected to represent some of the better-known conservative, liberal, young and old scholars. They include Nobel laureates, John Bates Clark Medal recipients, Econometric Society fellows, past presidents of both the American Economic Association and American Finance Association, past Democratic and Republican members of the President’s Council of Economic Advisers, and editors of leading economic journals. A full list of the respondents and their comments can be found at the IGM Forum Web site.
Economix Blog: What Economists Think About Raising the Minimum Wage
CATHERINE RAMPELL
Dollars to doughnuts.
As Christina D. Romer wrote in a column on Sunday, there is some disagreement among economists about the prudence of raising the minimum wage. The Initiative on Global Markets at the University of Chicago’s Booth School of Business recently queried a panel of 38 economic experts on the subject, and the responses were mixed, particularly about the effect on low-skilled job seekers. (Nancy Folbre mentioned this survey in passing in her weekly post; here are the fuller findings.)
These were the responses to the first question, which dealt with whether raising the minimum wage would make it more difficult for low-skilled workers to find jobs.
As you can see, of those who responded, about a quarter said they were “uncertain” about the proposition. Exactly zero percent said they either agreed or disagreed “strongly.”
It’s no wonder there’s so much expert uncertainty on this question, given the contentious and tangled literature on the subject. Twenty years ago, a groundbreaking study by Alan Krueger (now chairman of President Obama’s Council of Economic Advisers) and David Card was the first to use empirical data to study an increase in the minimum wage. It found that raising the wage did not reduce employment. Repeat studies since then have had more mixed results, and some have shown negative, though generally small, employment effects.
Ask economists about whether raising the minimum wage is worth the potential risks to low-skilled workers, though, and the responses tend to be much more favorable to a minimum-wage increase:
Nearly half of the panelists agreed or strongly agreed that the benefits of raising the minimum wage and indexing it to inflation outweighed the costs. In the comments section, several of the economists mentioned that other policies, like the earned income tax credit, might be better suited to addressing the needs of low-income workers. Professor Romer had mentioned this in her column, as well.
These responses do not necessarily reflect the beliefs of all economists, the way a traditional poll might aim to be; rather, the panelists are among the more elite members of their profession and were selected to represent some of the better-known conservative, liberal, young and old scholars. They include Nobel laureates, John Bates Clark Medal recipients, Econometric Society fellows, past presidents of both the American Economic Association and American Finance Association, past Democratic and Republican members of the President’s Council of Economic Advisers, and editors of leading economic journals. A full list of the respondents and their comments can be found at the IGM Forum Web site.
Article source: http://economix.blogs.nytimes.com/2013/03/04/what-economists-think-about-raising-the-minimum-wage/?partner=rss&emc=rss