Zoya Azhar ‘20
Assistant Opinions Editor
For the last three years, Massachusetts has seen a $1 per year increase in the minimum wage. Today it stands at $11 per hour, and lawmakers are considering bills to increase the minimum wage again.
To spur this decision on, professional economists in Massachusetts recently signed a letter supporting wage increases by $1 for the next four years, bringing the minimum wage to $15 by 2021.
Numerous faculty members from UMass Amherst signed this letter, as well as a handful of Economics professors at Smith. As The Sophian reported, among the Smith faculty that signed this letter was the current chair of the Economics department, Andrew Zimbalist and the previous chair, Charles P. Staelin.
The first questions that came to my mind were whether such changes would be beneficial for the long-term benefit of the economy and what the immediate impact would be, because even though I, a student worker making minimum wage at my campus job, would happily accept wage increases – I’m skeptical.
It would seem that asking employers to pay higher and higher wages to people may make employers want to hire less people, and so a wage increase would end up resulting in job losses.
As it turns out, economic literature discussing the effect of minimum wage of employment is inconclusive.
“Many econometric studies find that higher minimum wages do not lower employment,” said Zimbalist. “[This is because higher wages] engender greater worker loyalty and, hence, effort and productivity at the workplace [and] reduce turnover.”
“The gradual increase will allow businesses to adjust,” Zimablist said.
Charles P. Staelin told The Sophian, “I don’t think that the solution is to penalize the vast majority of minimum wage workers who do have the skills and experience their employers seek by keeping wages down.”
While I feel the latter is a value statement which looks at potentially disadvantaging the large number of young people who might be looking for a minimum wage job as they go to school, Staelin added, “Ultimately, wages are tied to productivity and the ultimate solution is therefore in education and training to allow younger and currently unskilled workers to skip over minimum wage jobs. Keeping wages low is not the long-run answer.”
And I agree that keeping wages low should not be the long-run answer simply because inflationary pressures will cause the worth of this wage to fall in real terms. However, risking reductions in the employment of new, relatively unskilled hires should also be considered in this decision. Some policy method of maintaining employment levels should also be explored if the minimum wage increase bill is passed.
