Thursday, October 12, 2006

Top economists call for U.S. minimum wage increase

Top economists call for U.S. minimum wage increase

NEW YORK (Reuters) - Hundreds of leading economists urged Congress on Wednesday to boost the U.S. minimum wage, which has been stuck at $5.15 an hour for a decade.

The group recommended a $1 to $2.50 hourly increase and argued that future boosts should be indexed to inflation to protect workers purchasing power from rising prices.

Dismissing the argument that better pay would burden employers and stifle job creation, these experts said a higher minimum wage was necessary to ensure a decent standard of living for low-income Americans.

"We believe a modest increase in the minimum wage would improve the well-being of low-wage workers and would not have the adverse effects that critics have claimed," the group including renowned academics for top U.S. universities said in a statement disseminated by the Economic Policy Institute.

Debate has been heated in Washington over the issue.

Back in August, an attempt to raise the minimum wage ran into trouble after Republicans attempted to link the increase to a permanent cut in estate taxes paid by the very rich. Democrats then decided to block the measure.

Some states have made some headway in ensuring better pay for low-income workers, by circumventing national legislation and passing increases of their own. California lifted the minimum wage to $8 an hour this summer, the highest level in the nation.