One idea currently getting a lot of attention is increasing the minimum wage to $15 per hour. A wage floor is an artificial impediment to the smooth functioning of the labor market, but one with some justification. It’s complicated.
In a country rich in natural. capital, and human resources, the adoption of a minimum wage is a matter of choice. In making this decision, the US opted (beginning in 1938) not to be globally competitive in certain low-wage sectors and to build our economy around higher value-added industries. The vast majority of Americans concur with this approach, and the results speak for themselves. The challenge is to get it right.
The proponents of a $15 universal minimum wage, who are predominantly well-intentioned but misguided, often cite the notion of a "living wage." This concept has merit but ignores salient facts. Slightly over 2% of the workforce and only 1% of full-time workers are paid at or below the minimum wage. Many of these employees are teenagers, retirees supplementing their incomes, or secondary earners.
