Politics

Former Obama Adviser Says $15 Minimum Wage Is Too High

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Economist Alan Krueger, a former adviser to President Barack Obama, said a $15 minimum wage is too high, because it could damage the economy.

“Research suggests that a minimum wage set as high as $12 an hour will do more good than harm for low-wage workers,” Krueger wrote in a Friday opinion piece for The New York Times. “But a $15-an-hour national minimum wage would put us in uncharted waters, and risk undesirable and unintended consequences.”

Krueger has a long career working for Democratic administrations. From 1994 to 1995, Krueger served as the chief economist at the U.S. Department of Labor, and in 2011 he served as chairman of the White House Council of Economic Advisers. His concern about the $15 minimum wage comes as Democrats become more adamant in their support for the wage.

“When Congress delays raising the minimum wage, states and cities typically step in and raise their own minimum wages,” Krueger noted. “That is exactly what is happening now.”

The federal minimum wage is $7.25 an hour, but is higher in many states, cities and counties. Currently only a few cities have gone as high as $15, but New York and Florida are considering it as well.

“Although available research cannot precisely answer these questions, I am confident that a federal minimum wage that rises to around $12 an hour over the next five years or so would not have a meaningful negative effect on United States employment,” Krueger continued. “But $15 an hour is beyond international experience, and could well be counterproductive.”

Krueger advocated for legislation from Democratic Sen. Patty Murray of Washington and Rep. Bobby Scott of Virginia that would raise the federal minimum wage to $12 by 2020. President Obama and Democratic presidential candidate Hillary Clinton support their bill.

“Economics is all about understanding trade-offs and risks,” Krueger stated. “The trade-off is likely to become more severe, and the risk greater, if the minimum wage is set beyond the range studied in past research.”

Supporters of the $15 minimum wage claim it will help the poor, because it would allows those in poverty to more easily afford basic necessities, which in turn would stimulate the economy. Critics argue the wage would hurt the poor, because employers would higher fewer workers.

Obama has pushed for a $10.10 minimum wage.

Studies on the impact of any minimum wage increase vary in their conclusions. But even the nonpartisan Congressional Budget Office found any increase of the minimum wage will likely result in at least some job loss. The National Bureau of Economic Research and The Heritage Foundation have both found young and low-skilled workers are hit worst by the effect on job opportunities.

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