Wednesday, August 31, 2016

How will the life of minimum wage workers change if the minimum wage was increased to $15 an hour?

How will the life of minimum wage workers change if the minimum wage was increased to $15 an hour?

An increase of the federal minimum wage to $15, from $7.24 at this writing in December 2015, will mean a 106% increase in pay, effectively a doubling of income for workers at the bottom of the pay scale. Over time, but not immediately, some of it will be eaten up by inflation (just as it has been already); but the hike is necessary to recover the earning power lost since 2009, the last time it was raised, very modestly, from $6.55. People who earn the minimum wage (it is mostly adults, some with families, not just teenagers as the restaurant industry wants you to believe), have had their earnings frozen.

More importantly, a raise in the minimum wage will likely affect all workers, since it raises the floor and for competitive reasons other wages will go up.

The "gold standard" study of the effects of increasing the minimum wage by Andrew Card and Alan Krueger, which has been replicated, proved that raising the minimum wage increases consumption and helps the economy. (The study is available here.)



This is a repost from my replies to questions posted on Quora, a question-and-answer site where questions are asked, answered, edited and organized by its community of users, at quora.com. The questions in italics and their subtexts are not mine.
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