In a hearing of the Senate Committee on Health, Education, Labor and Pensions last week on “indexing the minimum wage,” Massachusetts senator Elizabeth Warren inquired of University of Massachusetts professor economics Arindrajit Dube, “If we started in 1960, and we said that, as productivity goes up — that is, as workers are producing more — then the minimum wage is going to go up the same. And, if that were the case, the minimum wage today would be about $22 an hour. So, my question, Mr. Dube, is what happened to the other $14.75?”
In the president’s State of the Union address, he proposed raising the minimum wage from its current rate of $7.25 an hour to $9. The former head of President Obama’s Council of Economic Advisers, Christina Romer, has since taken to the pages of the New York Times to express her opposition to the proposal, which she argues “tends to be more popular with the general public than with economists.”