Economists, public aren’t buying the need for $15 minimum wage

Fight for $15 supporters are hoping that Tuesday is better than the last, when voters in Portland, Maine, and Tacoma, Washington, overwhelmingly rejected ballot measures proposing $15 municipal minimum wages.

Tomorrow, the SEIU-backed group is taking to the streets in major cities nationwide, including Raleigh, in yet another round of coordinated fast food protests. These “strikes” are part of the labor movement’s goal to reverse its decades-long membership decline and to organize millions of fast food employees into dues-paying members.

But like the $15 movement itself, these protests have lost their spark. The media have greeted each iteration with reduced interest, perhaps recognizing that the protests are more staged public relations than anything else. Recent polling by Google Consumer Surveys in New York – a frontline state in the $15 fight – also indicates that the public opposes a $15 minimum wage when it learns about the consequences.

A new survey released this week asking economists about their reaction to a $15 minimum wage is likely to throw even more water on the dying embers. The survey of 166 mostly labor economists, conducted for my organization by the University of New Hampshire Survey Center, found that 72 percent of U.S.-based economists oppose a $15 federal minimum wage. That includes a majority of economists who identify as Democrats.

This finding bolsters anecdotal reports of high-profile left-of-center economists from the Obama and Clinton administrations opposing such a wage mandate.

The survey also asked several additional questions that can help shed light on this finding. Five out of six respondents said that a $15 minimum wage would have harmful effects on youth employment levels. And two-thirds of respondents also said that a $15 minimum wage would make it more difficult for small businesses to stay in business.

Residents of West Coast cities like Seattle, San Francisco and Los Angeles that have already passed $15 minimum wages have seen this firsthand. A Z Pizza franchise in Seattle as well as popular restaurants Luna Park, Abbot’s Cellar and Source in San Francisco have gone out of business this year citing the wage hike as the driving reason. Numerous Los Angeles businesses plan to relocate outside city limits because of the increased labor costs associated with the wage hike.

Some $15 minimum wage supporters like University of California, Berkeley professor Robert Reich say that the wage hike is the right thing to do even if it does cost jobs. The overwhelming majority of economists disagree. Only 5 percent of respondents believe that a $15 minimum wage would be a very efficient way to address the income needs of poor families.

By contrast, 71 percent of respondents said that the Earned Income Tax Credit, which bolsters the incomes of poor households through the tax code, is a very efficient way to address the income needs of poor families. The EITC is a more targeted approach to poverty reduction because it helps poor households, not minimum-wage earners individually, who are more often than not second or third earners living in nonpoor households. (Nationally, the average household income of an employee affected by a $12 minimum wage is about $55,800.)

The results of this survey combined with last week’s election outcomes show that neither expert nor public opinion is on the side of the Fight for $15. While that’s bad news for Big Labor, it’s a good news for the young employees and small businesses that would lose out from such a mandate.

This story was originally published November 9, 2015 at 4:48 PM with the headline "Economists, public aren’t buying the need for $15 minimum wage."