Minimum Wage/Maximum Growth
Posted: 02/21/2013 3:20 pm
Robert D. Atkinson, Ph.D.
In his State of the Union Address president Obama proposed that Congress increase the minimum wage to $9.00 per hour.
Almost immediately a chorus of opposition based on neoclassical economics emerged, arguing that such a change would kill job creation. As former Bush Administration economist Greg Mankiw notes, “there is 79 percent agreement among his peers that a minimum wage increases unemployment among young and unskilled workers.” But let’s be clear, what Mankiw really means to say is a 79 percent agreement among neoclassical economists.
In fact, a higher minimum wage would spur economic growth, while also increasing economic fairness.
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