Should the minimum wage be increased? Depending on which expert you ask, raising the minimum wage (now $5.15 an hour) will help or hurt low-income workers.

YES

The main purpose of minimum wage laws is simple: to ensure that working people do not have to raise their families in poverty. But what you can buy with a minimum-wage income has fallen precipitously in the U.S. Today's $5.15 minimum wage buys about 40 percent less than what a minimum-wage income bought in 1968.

Someone working full-time at $5.15 per hour earns $10,712 a year--27 percent less than the official poverty level of $14,680 for a family of three. Families living at even twice the poverty line often experience serious hardships, such as missing meals.

The collapse of the minimum wage has generated a widespread "living wage" movement in the U.S., and more than 120 communities have passed laws to significantly raise local minimum wages in recent years.

Business groups oppose a higher minimum wage because it brings higher costs. But the increases are small; most are passed on to consumers through slightly higher prices. For example, I estimate that an average restaurant in Santa Fe, N.M., would have had to raise the price of a $10 meal to $10.30 to cover the cost of the city's increase in the minimum wage from $5.15 to $8.50 this year.

Opponents also say a higher minimum wage will result in layoffs, but researchers consistently find that it has little, if any, negative effect on jobs.

Raising the minimum wage will therefore help low-income families, while its costs will be barely noticed by everyone else.

--Robert Pollin

Professor of Economics

University of Massachusetts 

Amherst 

NO

Many people think that raising the minimum wage will help single parents struggling to raise a family. But according to U.S. Census data, only one in seven people earning the minimum wage fits that description. The biggest group--41 percent--of people earning the minimum wage live with a relative, like many of you.

The main reason not to raise the minimum wage is that it can push low-skilled adults (those one in seven who need the job the most) out of work. Their jobs might be eliminated altogether or performed by machines: Think self-service checkout.

The reason is rooted in hard economic reality. Imagine that you own a small business and spend time training undereducated employees, only to be told that you have to pay them more than their skills justify. In fact, some economists estimate that a 10 percent increase in the minimum wage causes up to a 6 percent decrease in teenage employment.

It is our responsibility to look after those who need help, but other programs can accomplish this far more efficiently than the minimum wage. For example, increasing the Earned Income Tax Credit would supplement minimum-wage incomes through the tax system without threatening jobs.

Some legislators have called for raising the minimum wage to $7 an hour. This would cost a small business with 10 minimum wage employees nearly $40,000 a year. It would surely lead to job losses, with low-skilled adults hit the hardest.

--Craig Garthwaite

Director of Research

Employment Policies Institute

Washington, D.C.