Survey: Most Economists Believe
Minimum Wage Hikes Increase Unemployment
WASHINGTON,
July 24 /PRNewswire-USNewswire/ -- An overwhelming majority of
American labor economists agree that minimum wage hikes are an
inefficient way to address the needs of poor families, according to
a new national survey of the American Economic Association (AEA).
The survey was conducted by the University of New Hampshire Survey
Center and sponsored by the Employment Policies Institute.
Over 73
percent of AEA labor economists believe that a significant increase
will lead to employment losses and 68 percent think these employment
losses fall disproportionately on the least skilled. Only 6 percent
feel that minimum wage hikes are an efficient way to alleviate
poverty. The survey also found:
Employers would turn to
better skilled employees: More than two-thirds of labor
economists (68 percent) believe a mandated wage increase will
cause employers to hire applicants with greater skills.
The minimum wage is not an
effective anti-poverty measure: 70 percent say that an expanded
Earned Income Tax Credit (EITC) would best assist those in
poverty. Nearly two-thirds (64 percent) believe that an expanded
EITC would lead to employment gains. Meanwhile, just 9 percent
say a higher minimum wage is the best anti-poverty measure and
only 6 percent believe that a minimum wage increase would lead
to employment gains.
Recent studies
on the effects of the minimum wage support the majority's opinion.
Research from David Neumark at the University of California at
Irvine shows that for every 10 percent increase in the minimum wage,
low-skilled unemployment increases by 8 percent. His results also
indicate that states fully affected by a $7.25 federal minimum wage
will see young minority unemployment rates increase by as much as
15.6 percent. Based on these results, today's wage hike is bad news
for African American teens who already suffer unemployment seven
times higher than the rest of the nation.
"Today's
federal minimum wage hike may sound like a good idea, but the
experts disagree," said Jill Jenkins, Chief Economist at the
Employment Policies Institute. "Low-skilled workers are getting much
less than has been promised. Over time, many may even find
themselves worse off." For more information, go to
http://www.EPIonline.org.
The
Employment Policies Institute is a Washington, D.C.-based research
organization dedicated to studying issues that affect entry-level
employment.
