Economists’ Statement on the Minimum Wage

June 8, 2001. The pdf version of this letter, which was sent to state senators, includes the list of signers.

We 80+ economists from throughout New York support an increase in the state minimum wage to $6.75 an hour. The Assembly has already passed a bill to this effect, and we urge you to join in this bipartisan effort to make work pay in New York State.

Increasing the minimum wage to $6.75 in 2002 and tying further increases to the regional Consumer Price Index will significantly raise income for over 1 million New York workers. Most of the beneficiaries are adults, most are female, and the vast majority are members of low-income working families. This increase is certainly affordable in light of the fact that in 1968 the minimum wage was equivalent to well over $7.00 an hour expressed in current dollars, compared to $5.15 an hour now.

By increasing its minimum wage, New York would join a growing list of states where voters and political leaders have chosen to take control over wage policy rather than wait for Congress to act at the federal level. There are now ten states plus the District of Columbia with minimum wage levels above the current $5.15 federal level, including four neighbors: Vermont ($6.25), Massachusetts ($6.75), Connecticut ($6.70 as of 2002), and Rhode Island ($6.15). These states hold in common a high level of average income and a high cost of living, two factors that favor a state minimum higher than the inadequate national floor.

In its 1999 Economic Report of the President, the Council of Economic Advisors remarked that “the weight of the evidence suggests that modest increases in the minimum wage have had very little or no effect on employment.” While controversy about the precise employment effects of the minimum wage continues, there is no reason to doubt that a modest increase in the minimum wage will achieve the intended goal of improving the well being of low-wage workers.