February 13th, 2013
08:28 AM ET
2 years ago

The fight over $1.75

Washington (CNN) – On Tuesday night Republican Rep. Paul Ryan took issue with President Barack Obama's proposal to increase the minimum wage arguing it will hurt, not help, the working poor.

"The goal ought to be to get people out of entry level jobs and into better jobs, better paying jobs. That's better education, that's a growing economy," the chair of the House Budget Committee said in an interview with CNN's Jake Tapper, "I don't think raising the minimum wage, and history's very clear about this, doesn't actually accomplish those goals."

Ryan, last year's GOP vice presidential nominee, can face off on that question with a well informed opponent inside the White House. Alan Krueger, the chair of the Council of Economic Advisors and the president's top economist, is something of an expert on the matter. He became nationally known in 1992 for his work on this topic.

In a paper written with David Card, he studied fast food restaurants in which the minimum wage went up and found the higher wage did not lead to job losses. In some cases, he found, it actually increased employment because the higher wage reduced turnover. Obama administration officials argue that can have a ripple effect on the economy because better paid employees spend more money in their community.

Other economists have taken issue with Krueger's findings and renewed their objections after the president's speech. In a blog post former top Bush White House economist, Keith Hennesey wrote "proponents of raising the minimum wage argue that it wouldn't reduce the number of available jobs that much....or they argue that when the minimum wage has been increased in the past they couldn't find evidence that employment declined".

READ MORE FROM CNNMONEY: The impact of a $9 minimum wage

He dismissed both as "absurd" arguments and called on Congress to reject what he deems a job-hurting proposal saying, "Congress can't outlaw economics any more than they can outlaw gravity."

No doubt Krueger and the president will have more to say on the matter as well. In his State of the Union address the president proposed gradually raising the minimum wage from $7.25 to $9.00 by the year 2015, and indexing the future figure to the cost of living index. The president first backed an increased in the minimum wage in his 2008 run for the White House. According to the National Women's Law Center two thirds of the people on the minimum wage are women.


Filed under: Alan Krueger • Economy • Paul Ryan • President Obama • State of the Union
soundoff (26 Responses)
  1. much thunder.little rain

    there goes the unemployment again ....10%... we need jobs ...if you earn 9 hour you will get it....no more mandates...

    February 13, 2013 10:15 am at 10:15 am |
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