Obama, Business Groups Differ On Minimum Wage Plan
Yet that study has come under fire from other economists, who argue that comparing different states over time shows that raising the minimum wage hurts job growth.
Mark Zandi, chief economist at Moody's Analytics, said a higher minimum wage would boost incomes for some poorer workers. But it would also discourage employers from hiring more of them.
"So on net, I am not sure it helps," he said.
William Dunkelberg, chief economist for the National Federation of Independent Business, said the increase would hit businesses hard and only hurt low-wage workers by reducing demand for their services."The higher the price of anything, the less that will be taken, and this includes labor," Dunkelberg said. "Raising the cost of labor raises the incentive for employers to find ways to use less labor." The government first set a minimum wage during the Great Depression in 1938. It has been raised 22 times since then â¿¿ the last increase went into effect in 2009 â¿¿ but the value has eroded over time due to inflation. Obama's latest plan would raise the hourly minimum to $9 by 2015 and as well as increase the minimum wage for tipped workers, which has not gone up for more than two decades. As for states that have already set minimum wages above the federal rate, they range from $7.35 in Missouri to the high of $9.19 in Washington. In 10 of those states â¿¿ Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont and Washington â¿¿ the minimum wage is automatically adjusted every year to keep pace with the rising cost of living. Women represent nearly two-thirds of minimum-wage workers, while black and Hispanic workers represent a higher share of the minimum-wage workforce than whites, according to the Economic Policy Institute. The last federal minimum wage increase was signed into law by President George W. Bush, when it increased from $5.15 to $7.25 in a three-step process between 2007 and 2009.
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