When it comes to policy choices, professional economists are famous for being overly circumspect. President Harry Truman once complained, “Give me a one-handed economist! All my economists say, ‘on one hand . . . on the other.’”
There are some areas, though, where basic economic theory is so obvious that it’s not hard to find a majority of economists to agree. A prime example is the popular, but misguided, proposal to raise the minimum wage to $15.
A recent survey of 197 U.S. economists found that more than two-thirds (88 percent) think an acceptable federal minimum wage should be less than $15, with 74 percent outright opposing raising it to $15 (strongly oppose, 61 percent; oppose somewhat, 13 percent).
The survey also found that a strong majority of economists believe a minimum wage of $15 will have negative effects on youth employment levels (84 percent), the number of jobs available (77 percent) and adult employment levels (56 percent). When asked what effect a wage of $15 will have on the skill level of entry-level positions, four-in-five (83 percent) believe employers will hire entry-level positions with greater skills.
Economists are divided on whether a wage of $15 will help or hurt poverty rates. One-third (38 percent) think an increased wage will lead to increased poverty rates, while 27 percent think it will be reduced, 19 percent say it will be unchanged and 16 percent are not sure. Most economists (64 percent) think the Earned Income Tax Credit (EITC) is a very efficient way to address the income needs of poor families, while only six percent believe a wage of $15 would be very efficient.
Two-in-five (39 percent) also think the minimum wage should remain at $7.25 or be lowered, with two-thirds in total (66 percent) believing the minimum wage should be $10 an hour or less.
Yet despite this expert opinion, House Democrats are pushing the Raise the Wage Act of 2019, a bill that would increase the federal minimum wage more than 100 percent by 2024. The legislation would also raise the minimum wage of workers who earn tips, like restaurant servers, by more than 600 percent the minimum wage.
Do these politicians not know the effect their policy would have on the low-skilled and working poor? Or do they just not care?