Martin Bashir | February 19, 2013
>>> nine, nine.
>> it's taken a while, but we may have finally found something that makes sense from the mouth of herman cain . it is the number nine. in his state of the union address , the president urged congress to raise the minimum page to $9 an hour. republicans immediately rejected this as a job killing exercise in big government . but once again it's their math that just doesn't add up. joining us now is former chief economic adviser to the vice president and senior fellow at the center on budget and policy priorities , the great jared bernstein. jared , okay, tell us. why is the number nine the right number at the right time when it comes to the minimum wage ?
>> because if you look at the history of minimum wage increases, they've always been in the kind of range that we're contemplating if we're talking about going from the current federal level of $7.25 to $9 in 2015 . the chart that you're showing there is one that i made over the weekend. i don't know what you do for fun on the weekends, but i like to take the alog rhythm of minute pages -- thanks for allowing me to talk about log rhythms on television. if there are children questioning whether you use your math in real life , sometimes you do. this shows that historically percentage changes in minimum wage increases have all been fairly much in the same change and that range right now would take us to about $9 an hour. that's important because at that range you don't see the kind of job loss effects that opponents predict.
>> okay. jared , well, you have just offered us some mathematical science . here is what republicans think of raising the minimum wage . take a listen.
>> you raise the price of employment, guess what happens? you get less of it.
>> i want people to make a lot more than $9. $9 is not enough. the problem is that if you can't do that by mandating it in the minimum wage laws.
>> he spoke of workers minimum wages instead of their maximum potential.
>> i think it's inflationary. i think it actually is counterproductive in many ways. you end up costing jobs from people who are the bottom rung of the economic ladder.
>> here we have republicans say the diametric opposite of what you just asserted. respond to that.
>> there is a long, long history of research on this question, but, yes, you do have to be willing to entertain evidence to understand that research. what it shows is that increases in the minimum wage of the magnitude we're con templating, again, going from $7.25 to $9 over a couple years, have historically been associated not with job loss effects of the type you just heard, but with actually doing what they're supposed to do, which is returning low wage workers a bit more of the economic growth that has done an end run around them for the last few decades. i mean, we have raised the federal minimum wage dozens of times. we have 19 states with their own minimum wages . this provides something rare in economics, a natural experiment where we can investigate the impact of these increases. it's not to say that a minimum wage increase never results in someone losing a job or getting fewer hours --
>> no one is suggesting that.
>> right. the question is are the net benefits positive for low wage workers? and the evidence is that they are hugely so, exactly the opposite of all the rhetoric you just heard.
>> that's one thing. but, jared , the average salary of someone on the minimum wage is currently about $14,500, which is below the poverty line . we're talking about working poverty line . raising it to $9 would mean an increase of about $3,500. now, that may not seem a lot to people like us , but in reality that is a massive difference in percentage and proportional terms to the income of someone currently on the minimum wage .
>> that's absolutely right. and, you know, we can actually get away from the percentages and think about what this means to people. the president said in the state of the union , that's the difference between the food bank and the grocery. look, if you provide someone at that level of income with another few thousand dollars a year, it really does mean that perhaps they can get those groceries they need, that they can perhaps provide something for their kids that they otherwise couldn't, and that they don't necessarily have to be so dependent on other government policies that would help them, that their actual wage that they can draw from the job market is more commensurate with a fair wage, something they themselves are contributing to the economy's growth.
>> jared bernstein, i and our audience are delighted you spend your weekends working on this because you just presented the skints of the minimum wage . i wish paul ryan was listening.
>> thank you, martin.