Britain’s low-paid army will get a rise whoever wins the election. Theresa May is committed to increase the minimum wage to £9 an hour by 2020. Jeremy Corbyn has trumped that by saying all workers, not just those over 25, should be on £10 an hour by the time the decade is out.

There was not always such cross-party consensus. The Conservatives fought hard against the minimum wage when it was first introduced by Tony Blair in 1998, arguing that state interference with the workings of the labour market would cost jobs. That claim – which flew in the face of a seminal study of the impact of raising the minimum wage in the US fast-food sector in the early 1990s – proved to be plain wrong. What was true of burger flippers in New Jersey was also true of burger flippers in Manchester. Unemployment fell in the years after the minimum wage was introduced and that trend has continued since the recession, with the jobless rate currently below 5%, despite above-inflation increases for the lowest earners. Indeed, the only period of rising unemployment since 1998 – during the financial crisis of 2007-08 and its aftermath – was also the only time the minimum wage was cut in real terms. Put simply, the minimum wage has boosted spending power and the increased demand has led to more jobs being created.

The evidence that the minimum wage does not lead to longer dole queues helps explain why the Tories now back the idea. But it is not the only reason. Employers can pay poverty wages knowing that they will be topped up by the government in the form of tax credits. This is effectively a taxpayer subsidy to companies, and it increased from £4bn in 1999 to £28bn in 2015; but judging by Britain’s poor investment record, there is scant evidence that the money saved by business was put to good purpose. Too often, it went on share buy-back schemes rather than on productivity-enhancing capital spending. Ministers rightly think it is time employers shouldered more of the burden, and a higher minimum wage is one way of doing that.

The Institute for Fiscal Studies has used an election briefing note to warn politicians against abandoning cautious increases in the minimum wage in favour of dramatic changes that risk costing jobs. Just because there has been no negative impact of the minimum wage in the past doesn’t necessarily mean there will be no impact in the future, the IFS says. It is particularly concerned about Labour’s plans, which would raise the cost of employing more than 7m workers by 15%. This is a very big increase at a time when employers are struggling with the effects of the falling pound on their fuel and raw material costs, and when Brexit has made the business climate for the next two to three years so uncertain. It seems improbable that a 62% increase in the minimum wage for 18-20 year olds – which is what Labour’s plans suggest – would not cost jobs.

Both Conservatives and Labour certainly need to tread warily. They would do well not to fixate about specific targets. There are some sectors of the economy, in particular social care, where particular attention needs to be paid so that firms working to ultra-tight budgets are not forced out of business. The minimum wage should continue to be linked to movements in average earnings and should not be divorced from what is happening to the economy. A minimum wage of £9 an hour – let alone £10 an hour – by 2020 looks ambitious when average earnings are rising by barely 2% a year.

That said, there is a case for politicians seeing how far they can push things. The Low Pay Commission, which was previously responsible for setting the low-pay floor, had become overcautious in the years after the recession, and it was time to try a more radical approach. The benefits – stronger demand, better staff retention, higher productivity, smaller welfare bills and greater equality – are clear.