Months into the US presidential primary season, American voters may be unused to hearing an ambiguous response to a public-policy proposal. But when it comes to the question of a $15 minimum wage and what it would do to US employment and productivity, economists, at least, are willing to admit to uncertainty.
The Initiative on Global Markets at Chicago Booth is back from summer hiatus with an Economic Experts Panel poll that addresses the $15 federal minimum wage proposals being considered by Congress and opined upon by presidential candidates.
Do they think a $15 minimum wage would increase unemployment? Five percent of the panel feels strongly about it, while nearly 40 percent are uncertain. Do they think it would increase aggregate output in the economy? Here about 20 percent strongly disagree. The rest leave room for discussion.
Steve Kaplan of Chicago Booth strongly agreed that raising the wage would adversely affect the unemployment rate: “A $15 minimum wage rise makes entry level/low wage jobs very expensive. It would move the US to be more like France, Italy, etc.”
David Autor of MIT disagreed: “I don’t think the evidence supports the bold prediction that employment will be substantially lower. Not impossible, but no strong evidence.”
And Oliver Hart of Harvard was uncertain: “I worry that it will, but we don’t know enough. Firms may raise prices and the Fed may accommodate some inflation. But the change is large.”
Anil Kashyap of Chicago Booth disagreed with the idea that a higher wage would bring a higher aggregate output: “Given ambiguous employment effects and the aggregate share of people getting raises, I doubt you get ‘substantially’ more output.”
Eric Maskin of Harvard was uncertain: “Aggregate demand should be bolstered, but the wage increase is so big that it’s hard to predict what would happen with much confidence.”