Is it a choice between higher pay or a job?

protesters in the US Image copyright AP
Image caption Workers are staging protests about low pay in over 200 US cities

Raising the minimum wage to $15 (£10) per hour has become a rallying cry for fast food and other US workers who are protesting low pay by walking off the job in over 200 cities.

This won't be reassuring, but economists are split as to whether raising the minimum wage will be at the cost of jobs.

In the US, though, the campaign to raise pay has been growing for several years. Workers have complained that the federal minimum wage of $7.25 per hour isn't enough to live on. That's why they chose today - tax filing day - to highlight that people who work are forced to rely on public assistance.

Employers are beginning to respond to the ongoing protests. Walmart, McDonald's and others have recently said that they will raise their minimum pay to $9 per hour. But, workers are after more.

At present, 42% of US workers make less than $15 per hour. Half of African Americans, 55% of women and nearly 60% of Latinos make less than $31,000 annually.

A study by the University of California at Berkeley finds that nearly three-fourths of all recipients of public assistance are from households where at least one member works. The researchers conclude that it's costing the US government $152bn per year in public support to make up for the shortfall in income from private sector work.

Image copyright Getty Images
Image caption Wealth in developed countries tends to be concentrated among a small percentage of the population

In just a couple of days since its release, it's already generated disagreement.

The low pay debate is a reflection of income inequality as well. I've written before about the Second Gilded Age. In the US, economic growth hasn't translated into more income for households: median incomes have stagnated as have wages.

When I asked Jason Furman, Chairman of President Obama's Council of Economic Advisers, about what the administration was doing to address inequality. He pointed to their call to raise the minimum wage from $7.25 to $10.10 per hour.

Raising the income of the poorest workers is an attempt to narrow the income gap and reduce poverty for an estimated 45.3 million people who live below the poverty line.

Focusing on those living in poverty, CEA estimates that it would boost incomes for about 12 million people and lift two million out of poverty.

One company's new minimum wage: $70,000

The proposal is still hotly debated over concerns that it could make it harder for low-skilled people to find employment since employers may be able to afford fewer workers. And that is still the crux of the debate over the impact of raising the minimum wage.

A survey of academic economists by the University of Chicago asked if raising the federal minimum wage would make it harder for low-skilled workers to find employment. The result was split between those who agreed and disagreed (34% and 32%, respectively) and 24% were uncertain.

But, 42% of those academics agreed that raising the federal minimum wage to $9 would be a desirable policy because it would increase the incomes of those low-skilled workers who can find employment. It should be noted, though, that one-third was uncertain about whether that benefit outweighs any impact on employment.

One boss has decided to act after reading that people are happier if they make an annual salary of $70,000. So, he raised the "minimum wage" for his 120 workers to $70,000 by trimming his own nearly $1m salary to $70,000 and sharing more profits.

If other firms did the same that would certainly do a great deal to reduce the 300 times salary multiple between the CEO and an average worker. It's certainly eye-catching and the progress of this company will surely be followed.

Bosses making the same as workers - now that would radically transform the workplace.

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