Fox host Brian Kilmeade is worried. Worried that President Obama's move to increase wages for some federal workers could lead to ... higher wages for workers?
Kilmeade's concern comes as Obama, in response to congressional inaction on raising the minimum wage, pursues executive action that will boost wages for federally contracted workers to a minimum of $10.10 per hour, effective January 1, 2015. The action will only apply to newly contracted workers.
Discussing the president's action on the February 12 edition of Fox News' Fox & Friends, Kilmeade warned of a “ripple effect” that could occur if other “start demanding raises.”
KILMEADE: And how is this going to affect business? Just think about this real quick, if you want to get - elevate everybody's minimum wage to $10.10 from $7 and something else, you have to say to yourself, those people who are making $2 above minimum wage, whatever it was, they're going to go “excuse me, could I have a raise? Because the whole country have a raise?” And then you got to ask every business owner, “can you handle that? Will it affect hiring?” So there's going to be a ripple effect. But the president's trying to show that he's not going to be hamstrung by a legislature that does not get along.
JOHNSON JR.: You're absolutely right, in the wake of bad job creation numbers over the last few days, the President is saying, “I'm for the working man and working woman in this country” although, it really won't have much effect at all. “I'm trying to send a signal,” as Brian says, that “I'm the guy, I'm you're guy, I'm for you, let's stop income disparity in this country.”
Kilmeade's concern trolling over whether increased wages will “affect hiring” is a canard. Economists say raising the minimum wage will help stimulate the economy while benefiting millions of workers.
In an open letter to Obama and congressional leaders, over 600 economists agreed that an increase would not negatively impact employment and could even have a “small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth.” The economists further highlighted the fact that a national minimum wage increase would cause a dramatic “spillover” effect that would boost compensation for millions “as employers adjust their internal wage ladders,” and, unlike Fox, noted that this is beneficial to the economy. From the open letter (emphasis added):
This policy would directly provide higher wages for close to 17 million workers by 2016. Furthermore, another 11 million workers whose wages are just above the new minimum would likely see a wage increase through “spillover” effects, as employers adjust their internal wage ladders. The vast majority of employees who would benefit are adults in working families, disproportionately women, who work at least 20 hours a week and depend on these earnings to make ends meet. At a time when persistent high unemployment is putting enormous downward pressure on wages, such a minimum-wage increase would provide a much-needed boost to the earnings of low-wage workers.
In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market. Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.
Economic experts at The Economic Policy Institute have called Obama's executive order “a good first step” toward improving wages for American workers and have repeatedly called on Obama to take this action to “insure that taxpayer funds are not used to create an ever larger workforce that is unable to escape poverty and support a decent standard of living.”