500+ Economists Against Raising Labor Costs

Over 500 economists (including three Nobel laureates) have signed a letter to “Federal Policy Makers” arguing that hiking the minimum wage would be damaging to job creation and the economy:*

As economists, we understand the fragile nature of this recovery and the dire financial realities of the nearly 50 million Americans living in poverty. To alleviate these burdens for families and improve our local, regional, and national economies, we need a mix of solutions that encourage employment, business creation, and boost earnings rather than across-the-board mandates that raise the cost of labor. One of the serious consequences of raising the minimum wage is that business owners saddled with a higher cost of labor will need to cut costs, or pass the increase to their consumers in order to make ends meet. Many of the businesses that pay their workers minimum wage operate on extremely tight profit margins, with any increase in the cost of labor threatening this delicate balance…For these reasons, we encourage federal policymakers to examine creative, comprehensive policy solutions that truly help address poverty, boost incomes from work, and increase upward mobility by fostering growth in our nation’s economy.

Check it out.

*Pic from Mark Perry

1 thought on “500+ Economists Against Raising Labor Costs”

  1. I realize that you’ve got economists (and nobel laureates) who are also in favor of raising the minimum wages, but it still seems like a no-brainer to me that you should not raise it because the EITC is a better policy tool to achieve the same ends. In other words: there’s doubt about the cost-benefit of raising the minimum wage. I don’t think there’s a lot of controversy over increasing EITC.

    So why are we still talking about the minimum wage again?

    Oh, yeah. Politics.

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