Obama’s Call for Minimum Wage Hike Presents Challenges

Obama’s Call for Minimum Wage Hike Presents Challenges

President Obama’s call to increase the national minimum wage stirs up a long standing debate in Washington; does an increase in wages help or hurt low income Americans? The Administration’s plan is to increase the minimum from $7.25 to $9.00 by 2015 in several stages.  White House officials believe the proposal would lead to higher wages for at least 15 million Americans, and possibly more because workers who earn just over the minimum might see a commensurate bump.

However, economists remain divided on the issue. “The effects of the minimum wage are declines in employment for the very least skilled workers,” said David Neumark, a University of California, Irvine, professor who has studied the issue with Federal Reserve researcher William Wascher. Mr. Neumark argues the benefits of higher minimum wages sometimes accrue to teens in higher-income families taking part-time jobs. “A lot of the benefits of minimum wages leak out to families way above the poverty line,” he said.

Regardless, the proposal likely will be opposed by Republicans and business groups, which have traditionally said raising the minimum wage discourages companies from hiring low-skilled workers.

Read the Entire Wall Street Journal Article Here

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