Does A Higher Minimum Wage Kill Jobs? Labor advocates say raising the minimum wage stimulates consumer spending. Problem is, with the unemployment rate still at 8.8 percent, elected officials don't want to do anything that might discourage job creation.
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Does A Higher Minimum Wage Kill Jobs?

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Does A Higher Minimum Wage Kill Jobs?

Does A Higher Minimum Wage Kill Jobs?

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LIANE HANSEN, Host:

Welcome back, Marilyn.

MARILYN GEEWAX: Hi, Liane.

HANSEN: A lot of consumer prices are up this year. We talked about it, gasoline in particular. Is the government inclined to increase the minimum wage to help keep pace?

GEEWAX: Well, certainly a lot of workers wish government would act. When the minimum wage was last increased in July of 2009, the cost of gasoline was about $2.50 a gallon. This summer, the pump price will probably be about twice that in a lot of cities. And, you know, the cost of buying your lunch is going to go up too, because we're seeing higher meat and dairy prices.

HANSEN: So is there any chance Congress will consider a minimum wage hike then?

GEEWAX: But since that time the job market has remained really weak. And Republicans have regained control of the House. So no one really expects this Congress to impose a minimum wage increase on employers for a very long time anyway, and certainly not in response to these gas prices.

HANSEN: So what about the states? I mean the minimum wage is higher in some states.

GEEWAX: That is true. Seventeen states and the District of Columbia have minimum wages above the federal level. For example, in Oregon, the minimum is now $8.50 an hour. So some labor advocates think that they actually have a better chance of helping workers by focusing their efforts on state legislatures. But so far, no state has voted to increase the wage this year.

HANSEN: Marilyn, economists have been arguing over the minimum wage since it was enacted in 1938. Why isn't there a consensus on this issue yet?

GEEWAX: But it's interesting that while economists in this country have been arguing about this, officials in other countries, especially in Asia, they're going ahead and raising the minimum wage. In China, Indonesia, Mongolia, Malaysia, Vietnam, Cambodia; all of these governments are in the process of either introducing or toughening their minimum wage laws.

HANSEN: But if the economic studies are so contradictory, why are those governments imposing them?

GEEWAX: Well, I can't say whether or not the Asian government leaders are reading the same economic journals that I do. But they are seeing that their low-wage workers are getting angrier about these rising food prices. So rather than risk political unrest, they're trying to boost the wages of their workers so that people can keep up with these rising food and fuel prices.

HANSEN: NPR's senior business editor Marilyn Geewax. Thanks as always, Marilyn.

GEEWAX: I'm happy to do it, Liane.

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