By Steffanie Wynn
While minimum wage has been an issue in both Congress and the Utah Legislature in recent years, economists say that raising Utah”s minimum wage may have little or no impact.
The last time the federal minimum wage was increased was in 1997 when it rose from $4.75 to $5.15.
Although the majority of states have since raised the state minimum wage, Utah continues to rest at the same federal rate, according to the U.S. Department of Labor.
“Raising the minimum wage in Utah probably wouldn”t affect [people] much,” said Lars Lefgren, BYU assistant professor of economics. “Most people don”t get paid minimum wage anyway.”
The demand for workers in Utah has naturally forced wages up, said Jim Robson, an economist for the Utah Department of Workforce Services. Average wages went up 6 percent in Utah County between 2005 and 2006, Robson said.
“Right now it”s hard to say that [raising minimum wage] would have a very big impact because of the tight labor market,” Robson said. “Businesses are already competing for workers by offering higher wages so things probably won”t change much.”
Consumers probably wouldn”t be affected very much by a minimum wage increase either, Lefgren said.
“There will be some higher costs passed along to the consumer, especially in the industries most affected like retail and fast food, but it won”t be enough of a difference to notice or really have an effect,” he said.
One argument against raising the minimum wage is that it might cause increased unemployment.
“If you increase the minimum wage, there may be some businesses in Utah that reduce employment a little, but those workers will likely be absorbed by other businesses,” Robson said.
The Economic Policy Institute estimates that nationally about 13 million workers would benefit from a minimum wage increase, or approximately 10 percent of the workforce. The institute works to protect wage equality and broaden the discussion on economic policy issues involving low-income workers.
According to the institute, a minimum wage increase is necessary to adjust wages because of inflation and bring them up to historic levels.
Federal minimum wage has not been increased in almost 10 years, marking the longest period of time the federal government has gone without adjusting minimum wage.
