CAP Expert Panel Discusses Raising the Minimum Wage to Promote Economic Recovery
“Raising the minimum wage is good economics and good politics,” said David Madland, Director of the American Worker Project at the Center for American Progress Action Fund, at a June 7 event co-sponsored by the Center for American Progress and the National Employment Law Project. Madland explained that new cutting-edge economic studies demonstrate the economic benefits of increasing the minimum wage. “Raising the minimum wage does not kill jobs—even during periods of high unemployment,” he said, but instead encourages spending, investment, and economic growth.
An expert panel discussion followed opening remarks from Helen Neuborne, director of the Quality Employment Unit of the Ford Foundation, and featured Michael Reich, professor of economics and director of the Institute for Research in Labor and Employment at the University of California, Berkeley; Sylvia Allegretto, deputy chair of the Center on Wage and Employment Dynamics, University of California, Berkeley; Celinda Lake, the president of Lake Research Partners, a prominent political research firm; Heidi Shierholz, economist at the Economic Policy Institute; and panel moderator Paul Sonn, the legal co-director of the National Employment Policy Institute.
The panel explained that two major new studies solidify two decades of research that find no negative effects from a minimum wage increase and discredit the economic claims of earlier decades that increases in the minimum wage negatively impact employment.
In both cases, the investigators found that increases in the minimum wage did not have any discernible impact on job losses or slow rehiring, even during recessions or periods of high unemployment. “Negative employment effects do not materialize,” Allegretto said.
Raising the minimum wage from its federally mandated level of $7.75 would not only have a positive effect on the lives of workers living in poverty, but also stimulate the American economy. A minimum wage increase shifts money from corporate entities disinclined to spend their capital, and into the hands of American workers, sparking consumer spending crucial to economic recovery on Main Street.
“An increase of the minimum wage from $7.75 to $8.25,” researcher Heidi Shierholz notes, “would give 10 million workers a raise,” and could stimulate economic growth to the tune of 50,000 new jobs.
Watch the opening remarks and following expert panel discussion hosted at CAP here; read more about groundbreaking research on the minimum wage here.