President Obama called for an increase in the minimum wage from $7.25 to $9 per hour during his State of the Union last night, a proposal that was quickly rejected by top Republicans like Sen. Marco Rubio and Rep. Paul Ryan. Today, House Speaker John Boehner (R-OH) also came out against the proposal.
“When you raise the price of employment, guess what happens? You get less of it,” Boehner said at a House Republican press conference this morning. “At a time when Americans are still asking the question ‘Where are the jobs?’ why would we want to make it harder for small employers to hire people?”
Contrary to Boehner’s claims, research suggests that minimum wage increases have little or no effect on job creation. One study found “no detectable employment losses,” another found “no impact on hours worker or employment levels,” and another found that the minimum wage actually strengthens employment. Other studies found that raising the minimum wage doesn’t impact job growth even if it is done during periods of high unemployment.
The low-wage job sector accounts for a majority of the jobs created since the recession, but the minimum wage remains historically weak. To match the buying power it had in 1968, today’s wage would need to be raised by $3 per hour. The Economic Policy Institute estimates that raising the minimum wage to $9 per hour would benefit 21 million workers.