It's rare to see bipartisan agreement these days, but when it comes to a $15 minimum wage, both right- and left-leaning economists agree that it's a bad idea. That's especially the case for a city such as Baltimore, where the City Council is expected to take a final vote on a $15 minimum wage later this month.It sure does sound good to have minimum wage workers get close to a living wage. Is this the necessary policy to get workers to that wage?
A University of New Hampshire survey published by my organization in late 2015 found that nearly three-quarters of economists oppose a broad $15 wage mandate. Dissenters include former members of the Obama and Clinton administrations, including Georgetown University professor Harry Holzer. Holzer is no right-wing ideologue: He was Bill Clinton's top economist at the Labor Department, and he supported a $10.10 minimum wage at the federal level, a goal that Maryland embraced at the state level. But writing about a $15 minimum wage in Fortune magazine, Holzer called the policy "extremely risky," and warned cities like Baltimore that "local increases of this magnitude will generate big incentives for employers to move across local borders, especially from central cities to suburbs."
The former Clinton economist also noted that the $15 number is outside the historical norm. He's right: Since the federal minimum wage was first created in 1938, the inflation-adjusted average minimum wage is roughly $7.40 an hour. Embracing a city-specific wage floor that's far above this historical average isn't just risky--it's careless. It's also not responsive to the real needs of the city's low-income residents, many of whom need a job rather than a raise.