Minimum Wage: What's Wrong With Increase?

As the 110th U.S. Congress convenes tomorrow, issues like an increase in the minimum wage are top priorities for the Democrats in power. Even President George W. Bush is pushing for the increase. So what could be so bad about paying workers more? Mike Flynn of the Employment Policies Institute was on “Morning Call,” and he says we’re not getting the full story.

According to Flynn, Bush is supporting a minimum wage increase in addition to tax cuts and other proposals to help business. All this points to the economic impact these increases can have, he says. And just as important, a jump in wages raises the lowest rung on the job ladder and makes it harder for low-skilled workers to find jobs.

Liana Fox of the Economic Policy Institute was also on this morning. She says there is plenty of research that refutes Flynn’s claims. After the last increase in 1996-’97, the low-wage economy performed better than it had in decades. There were lower poverty rates and higher average wages, and while these factors may be credited to the minimum increase – they still happened in spite of it.