Recently, Costco President and CEO Craig Jelinek joined other business owners in support of a proposal that would gradually raise the federal minimum wage to $10.10/hour and peg future increases to inflation, much like we do here in Washington state.
In a statement from Business for a Fair Minimum Wage, Jelinek said: “An important reason for the success of Costco’s business model is the attraction and retention of great employees. Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty. We support efforts to increase the federal minimum wage.”
As the New York Times Economix blog recently reported, economists are generally split on the question of whether or not the minimum wage may make it harder for low-skill workers to find jobs. More recent, sophisticated studies have shown that raising the minimum wage had no effect on employment, although other studies “have shown negative, though generally small, employment effects.” None of the economists polled felt strongly either way.
Despite their uncertainty around employment affects, there’s little debate among the economists polled that raising the minimum wage would be a net benefit for those same low-skill workers. Nearly half of the economists polled agreed that raising the minimum wage would be worth any potential downside, while just 11% disagreed.