The federal minimum wage should be raised to $15 an hour

- The federal minimum wage should be raised to $15 an hourThe federal minimum wage has been $7.25 / hour since July 24, 2009. [1]“In the 2014 State of the Union address, President Obama called again on Congress to raise the national minimum wage, and soon after signed an Executive Order to raise the minimum wage for the individuals working on new federal service contracts.” [2]There is much debate among policy makers about the merits of minimum wage and about the effects of different policies. The conservative narrative is that having a minimum wage increases unemployment among teens and other unskilled workers. The liberal position points to research done by David Card and Alan Krueger that concludes that there is no evidence that raising worker pay had killed jobs. [3]There is so much conformational bias among those writing on the subject that the experts look at the same data and come to opposite conclusions. Some researchers say that raising the minimum wage will cause increased unemployment. Card and Krueger found that an increase of 19% in the minimum wage ($4.25 to $5.05) did not reduce employment rates. [3]Some say that an increase in minimum wage will cause an unacceptable increase in prices. If the minimum wage were increased to $15 an hour, prices at fast food restaurants would rise by an estimated 4.3 percent, according to a new study. That would mean a McDonald’s Big Mac, which currently goes for $3.99, would cost about 17 cents more, or $4.16. [4]Some claim that an increase in the minimum wage will reduce staff turnover. “In 2013, the turnover rate for franchises was 93 percent, and it can cost $4,700 per worker who leaves. A previous study found that for every 10 percent increase in the minimum wage, turnover drops by 2.2 percent, and a $15 wage would come with $5.2 billion in savings for the fast food industry.” [4]All of this calls into question the published literature on the minimum wage. “The minimum-wage effects literature is contaminated by publication selection bias, which we estimate to be slightly larger than the average reported minimum-wage effect. Once this publication selection is corrected, little or no evidence of a negative association between minimum wages and employment remains.”[5]The misinformation around the minimum wage is so constant that the U.S. Department of Labor has set up a web page trying to debunk the common myths. [6]In light of this we need to do a controlled experiment on a national scale to see both the value and the harm done by raising the minimum wage raised by a significant amount.The federal minimum wage should be raised to $15 an hour.This should be introduced incrementally so we can measure the effects of the change to the federal minimum wage. (I suggest $2.58 / hour increase on Jan 1 each year for 3 years).This would give us good data to draw some conclusions about what effects the minimum wage has on around issues of poverty and economics.Here are some questions that need more data. Does increasing the minimum wage reduce jobs? - Current data says job growth is better with an increase in minimum wage. Does increasing the minimum wage help the poor? - Current research suggest it will mostly help middle class white women.Does increasing the minimum wage reduce poverty? - Current research suggests that most in poverty are not working at minimum wage jobs. The prime factors causing poverty are: Current Poor Economy; Drug Use; Lack of Education and Medical Expenses.[7]Do we even have a good definition of poverty? [8] Current definitions of poverty (for government policy considerations) have nothing to do with insufficient food or insufficient housing.The minimum wage debate is crippled by a lack of good information. Statements of position are presented like articles of faith which demand belief without question. We should raise the minimum wage substantially so we can see what effect, if any, all our minimum wage policies have. Then we can see if the minimum wage is a useful economic too or not.- The federal minimum wage should be raised to $15 an hour1. www.dol.gov/dol/topic/wages/minimumwage.htm2. www.whitehouse.gov/raise-the-wage3. www.davidcard.berkeley.edu/papers/njmin-aer.pdf4. www.thinkprogress.org/economy/2015/08/03/3687171/15-minimum-wage-big-mac/5. www.onlinelibrary.wiley.com/doi/10.1111/j.1467-8543.2009.00723.x/abstract6. www.dol.gov/minwage/mythbuster.htm7. core197b.wikispaces.com/Major+Causes+of+Poverty+in+America8. www.heritage.org/research/reports/2011/09/understanding-poverty-in-the-united-states-surprising-facts-about-americas-poor