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November 11, 2015

Will raising the minimum wage help workers?

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Thousands of fast food and other low-wage workers protested across the country Tuesday as part of a growing movement calling for a $15 minimum wage. The federal minimum wage has stood at $7.25 an hour since 2009, but several states and cities have set higher minimum wages.

“Maybe I wouldn’t have to work two jobs, and maybe I wouldn’t have to work seven days a week, you know, or even sometimes we work on holidays just to make a little holiday pay extra,” one protester said.

New York just became the first state to raise its minimum wage to $15 an hour.

While Democratic presidential candidates Martin O’Malley and Bernie Sanders back the $15 number, Hillary Clinton favors a more gradual rise to $12 instead. Nearly all Republicans favor keeping the federal minimum wage near where it currently stands.

Alan Krueger, an economics professor at Princeton University and the former chairman of President Barack Obama’s Council of Economic Advisers, supports the $12 minimum wage. “If you move it up to $15 an hour nationwide, I’m concerned that that is well beyond what we have seen in past research. And if I were advising the president today, I would say I think that’s a risky level,” Krueger said.

In response to those who say forcing businesses to raise wages will hurt the economy, Krueger pointed to nations in Europe in which a higher minimum wage actually benefited both employees and employers.

“They have lower turnover. They get more job applicants. They can fill vacancies that they have,” he said. “Productivity is higher, and that enables them to afford the higher minimum wage.”


Vocab

minimum wage — the lowest wage permitted by federal, state or local law or by a special agreement with a labor union or other entity. Since 2009, the federal minimum wage has been set at $7.25 an hour.

labor market — the supply of available workers in relation to available work

inflation — a general increase in prices and fall in the purchasing value of money

Warm up questions
  1. How much is the minimum wage where you live?
  2. What kinds of workers earn minimum wage?
  3. Is it possible to live comfortably while earning minimum wage?
Critical thinking questions
  1. Why do some Democrats support a more gradual and lower raise in the federal minimum wage?
  2. Why do many Republicans believe raising the minimum wage would be bad for the economy?
  3. Do you think the minimum wage should be the same in all parts of the country? Why or why not?
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