The president’s plan to raise the federal minimum wage will benefit 15 million American workers, and have a positive effect on the economy. Still, there are some common myths about raising the minimum wage. We checked in with our Chief Economist Jennifer Hunt on the following three myths:
Myth: Raising the minimum wage reduces employment.
False. Minimum wage increases have little or no adverse effect on employment as shown in independent studies from economists across the country. Additionally, a recent letter by leading economists including Lawrence Katz, Richard Freeman, Joseph Stiglitz and Laura Tyson points out that “[i]n recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum wage workers, even during times of weakness in the labor market.
Myth: Only part-time workers are paid the minimum wage.
False. 53% of all minimum wage earners are full-time workers.
Myth: Raising the minimum wage will negatively affect teen employment.
False. 89% of those earning the minimum wage are 20 years of age or older, and studies have shown that minimum wage increases have had little or no adverse effect on teen employment.
For more information about the federal minimum wage, visit: http://www.dol.gov/minimumwage.
***Note: The data analysis comes from the White House Council of Economic Advisors.