Top Labor Official Justifies Minimum Wage Bill With Debunked Study

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Labor Secretary Thomas Perez cited a decades old and debunked study Thursday to justify a proposed measure that would increase the federal minimum wage to $12 an hour.

Perez fielded questions by reporters about the proposed measure during a press conference on the Hill. Democrats Rep. Bobby Scott and Sen. [crscore]Patty Murray[/crscore] introduced the measure Apr. 30, 2015 as a way to raise low-income individuals out of poverty. Perez cited a highly refuted study by Alan Krueger and David Card when asked by The Daily Caller News Foundation about the risk of job loss.

“Study after study starting with Alan Krueger at Princeton years ago and then replicated by hundreds of other meta studies have demonstrated that when you have a bill like Bobby Scott and Sen. Murray have, that raises the minimum wage in steps, that the benefits far outweigh the costs,” Perez answered.

Princeton released the study in 1993 a year after New Jersey raised its minimum wage from $4.25 to $5.05 an hour. Krueger and Card found that employment in the state actually increased. The study appeared to upend a previous study commissioned by former President Jimmy Carter in 1977 that found raising the minimum wage could hurt employment.

Krueger and Card based their findings on survey data collected from state fast-food owners. When later reports looked instead at payroll data, employment actually went down. Card and Krueger claimed to have reaffirmed their original findings in 2000 after taking a look at the payroll data but even other studies supporting the policy rarely find employment goes up.

Perez admitted that employment could potentially be harmed but added the impact would be marginal at best. The nonpartisan Congressional Budget Office, for instance, found in 2014 that through raising the minimum wage, many more workers would benefit than potentially be harmed. The University of California, Berkeley found similar results in a more recent study Mar. 10 when it looked at New York state specifically.

Not all economists are in agreement, with many warning a higher minimum wage will have a huge impact on employment. The National Bureau of Economic Research (NBER) and The Heritage Foundation determined the impact is especially bad for young and low-skilled workers. The current federal minimum wage is at $7.25 an hour, making $12 a huge jump.

The Department of Labor did not respond to a request for further comment by TheDCNF.

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