This country thrived for many years without a minimum wage. Now the minimum wage is here
to stay, and as a matter of political reality, it can never be decreased or frozen — and certainly
not eliminated.
The minimum wage was originally intended to be a fair wage for
entry-level, menial, unskilled labor that anybody could do. It was
never intended to be enough to feed an entire family or put the kids through
college. For that you need a good job — one that only comes
from experience, education, and stable employment.
The minimum wage (like most other government intervention) does more harm than good. And if you'll
look around at the grocery store, or a fast food restaurant, you'll see there are plenty of people
who demonstrate that the minimum wage is too high already.
Notice if you will that whenever the minimum wage is discussed on television "news" programs,
they'll always show footage of welders, construction workers, auto mechanics and other blue collar
workers, none of whom earn the minimum wage.
Bad Law,
Worse Timing. The federal minimum wage rose by 70 cents yesterday [7/24/2008] to $6.55 per
hour, and left-wing advocates are celebrating the increase as a boon for the so-called working poor. Not
to be party poopers, but the reality is that most poor people in the U.S. already earn more than the minimum
wage, and most workers who do earn the minimum wage aren't poor.
How's That Minimum Wage Hike Working,
Speaker Pelosi? Since the second leg of the minimum wage hike is about to go into effect, and since
we are in the middle of presidential and congressional election season that has to a great extent focused on the
state of the economy, one cannot help wondering what Speaker Pelosi and the rest of her Democratic cronies have
to say about the success of their "progressive economic agenda."
Two Cheers for
Obama. Despite his enormous appeal, Obama is an over-the-cliff-and-tumbling-into-the-canyon-Left,
big-government, tax-hiking spendthrift. ... Obama endorses a 45 percent minimum-wage increase, from
$6.55 to $9.50. Why not simply triple it, to $19.65? Employers would love that.
Jobless rate at 5-year high.
An unexpectedly steep 84,000 U.S. jobs were lost in August and the unemployment rate hit a five-year high
of 6.1 percent, fanning worry ahead of November's presidential vote that the economy was near
recession.
The Editor says...
This "5-year high" statistic comes right after the latest increase in the minimum wage. Indeed,
the minimum wage is at a record high.
What
the Media Didn't Tell You About Friday's Unemployment Spike: Hundreds of thousands of students
are looking for work right now, and they're not finding it. Congress is to blame. Last year
Congressional Democrats (along with some Stockholm-Syndromed Republicans) passed the Fair Minimum Wage Act of
2007, which started a phased hike of the minimum wage from $5.15 an hour to $7.25. Free market economists
warned them that this would increase unemployment — that rapid increases in unemployment
compensation hit teens and minorities the hardest.
Mean To Teens: When
Democrats in Congress finagled a jump in the minimum wage last year, they crowed about their victory. Now
Americans are finding out what it cost as the unemployment rate shoots up. … [In May] hundreds of thousands
of youths poured onto the job market at the same time, thanks to the end of the school year. But many, if
not most, won't find jobs. They've been priced out of the market.
Look
for the Union Label. What do the farm bill, the cap-and-trade global warming bill, the clean
water bill, the housing bailout bill, and the school construction bill all have in common? Not much,
except that in each one and countless others the Democratic majority in Congress has inserted "prevailing-wage"
requirements that amount to a super-minimum wage. We're speaking of Davis-Bacon, the 1931 law that
originally applied to road building and other federal construction projects and set a floor on wages in part to
price black and Mexican workers out of the work. Today, its main impact is to require de facto union wages.
July 24, 2007...
Minimum
wage goes up today. The first of three year-over-year increases, a 70-cent bump, will bring the
minimum wage to $5.85 an hour. It's the first increase in 10 years, when the minimum wage was set
at $5.15 an hour. The minimum wage will increase 70 cents each summer, reaching $7.25 per hour
in 2009.
L.A.
living wage law is upheld. The 3-0 ruling by a panel of the 2nd District Court of
Appeal in Los Angeles means that the city can now implement a law that would provide salary and
benefits equal to $10.64 an hour to workers at a dozen LAX-area hotels.
Deal reached on minimum wage
increase. Democratic efforts to raise the minimum wage to $7.25 an hour got a big boost Friday
evening [4/20/2007] as House-Senate negotiators reached a deal on a package of business tax incentives
accompanying the wage increase. … The wage would increase from $5.15 to $7.25 per hour over the next two
years under companion House and Senate bills, but the two chambers struggled over how much tax help to award
businesses employing minimum wage workers.
Minimum Wage Increase to Become Reality.
This would be the first change since the minimum wage went from $4.75 to $5.15 on Sept. 1, 1997, under
former President Clinton and the Republican-controlled Congress. The minimum wage provisions were one
part of the Iraq war spending bill that did not change: the minimum wage goes up to $5.85 two months
after Bush signs the bill, then to $6.55 one year later and to $7.25 the next year.
[Why is this part of the Iraq war spending bill?]
Bush Supports
Democrats' Minimum Wage Hike Plan. President Bush for the first time endorsed a specific plan
for raising the federal minimum wage yesterday [12/20/2006], as he embraced Democratic calls to boost it
by $2.10, to $7.25 an hour, over two years. … The president's endorsement of a minimum wage increase
breaks with the position long held by conservative Republicans that the increase would hurt business
and ultimately the economy.
House passes minimum wage
increase, will rise to $7.25 an hour in next 26 months. The Democratic-controlled House voted
Wednesday [1/10/2007] to increase the federal minimum wage to $7.25 an hour, bringing America's lowest-paid
workers a crucial step closer to their first raise in a decade. The vote was 315-116. "You should
not be relegated to poverty if you work hard and play by the rules," said House Majority Leader Steny Hoyer,
D-Md.
[No, the people who are relegated to poverty are those who are lazy, illiterate, and belligerent.]
House passes minimum wage bill with
tax breaks. The House overwhelmingly approved business tax breaks worth $1.8 billion over
10 years yesterday [2/16/2007], a key step toward forging a congressional compromise on increasing the
minimum wage. The vote on the tax cuts was 360-45.
Raising Maine's Minimum Wage Will Result in Job
Loss for Low-Skilled Workers. Substantial economic research clearly shows that large increases
in the minimum wage decreases employment, particularly for the least skilled employees in the economy.
Minimum wage fight teaches Dems about
limited power. While final passage is highly probable, Democrats and their allies in organized
labor long ago capitulated to GOP demands, agreeing to accept business-friendly tax cuts as the price for the
first minimum wage increase in a decade.
Sticking it
to Low-Skilled Workers. The law of supply and demand, which operates whether we like it or not,
says that when the price of something goes up, people buy less of it. … The law of supply and demand
works in the labor market, too. If government mandates a higher minimum wage, some workers will get a
raise. Some. But something else will happen. Employers will hire fewer low-skilled workers.
Others will let some current workers go. Some will choose not to expand their businesses. A few will
close altogether. If an employer believes a worker creates only about $5.15 worth of value on the job, he
won't pay $7, even if the government demands it.
Minimum Wage Bill Flawed. Contrary to
what its supporters claim, the minimum wage bill Congress recently passed is unfair to workers and, in most cases,
will harm the very workers it supposedly is designed to help. In fact, most workers will experience a
minimum-wage penalty rather than a minimum-wage benefit because of this bill. This bill has far more to do
with increasing the political capital of politicians in Washington, D.C., rather than increasing real wages of
low-income families.
The
Temperamental Minimum Wage: The first fundamental law of demand postulates that the lower the
price of something, the more will be demanded, and the higher the price, the less will be demanded.
To my knowledge, there are no known exceptions to the law of demand. That was until last fall when 650
economists, including several Nobel Laureates, signed a letter calling for an increase in the minimum wage.
Familiar
Problem Stalls Minimum Wage Bill. When Democrats campaigned last fall to recapture control of
Congress, few domestic issues seemed to have as much winning potential as raising the minimum wage.
Democrats ostentatiously signed pledges to block any pay increase for Congress until it raised the minimum
wage. They organized ballot initiatives to raise the state minimum wage. And when they did
recapture the House and the Senate, Democrats made it a top priority. Yet after six weeks in power, the
Democratic-led House and Senate have yet to agree on a final bill.
Welcome Back
to Democratland. Rep. Bill Pascrell proclaimed that "The little guy is not going to be forgotten
any longer." Sounds great. The Democrats are back in power, and now the deserving working poor are
finally going to be paid a living wage. Except that it isn't true. Fewer than one in five minimum
wage workers lives in a family with income below the poverty line. Despite the picture painted by the
Democrats in Washington, more than 82 percent of minimum wage workers have no dependents, according to the
Bureau of Labor Statistics.
2007 EPI Minimum Wage Survey of Labor Economists:
Almost three-fourths of labor economists (73%) believe that a mandated minimum wage increase set at 150% of the
current wage would result in employment losses. Similarly, more than two-thirds of labor economists
(68%) believe a mandated minimum wage would result in employers hiring more applicants with greater skills,
and nearly one-third (31%) believe there would be no change in hiring practices.
Democratic Agenda Running on Empty.
The nonpartisan Congressional Budget Office (CBO) examined the effects of increasing the minimum wage from
$5.15 to $7.25 per hour. It confirmed that the overwhelming majority of minimum-wage workers live in
households with incomes too high to qualify for welfare programs such as the Earned Income Tax Credit, Food
Stamps or Medicaid. In fact, CBO estimated that only 18% of these workers had total cash incomes below
the federal poverty threshold.
Minimum Wage Socialism: The idea
that legislators can help low-income workers simply by mandating a pay raise is the height of hubris.
While the minimum-wage rhetoric may sound good, the reality is quite different. Forcing employers to pay
low-skilled workers a higher than market wage — in the absence of any changes in
productivity — will decrease the number of workers hired (the law of demand).
Increases in Minimum Wage Hurt Small Business and
Employees. Government manipulation of the starting wage has failed as tool of social and/or
economic justice. It has not been proven to reduce poverty or narrow the income gap and puts a
stranglehold on America's top job creators: small businesses. The overwhelming majority of
economists continue to affirm the job-killing nature of mandatory wage increases.
Restaurant owners stew over new
rules. The first big hit to the San Francisco restaurant industry came three years ago this
month — a $1.75-an-hour increase in the minimum wage. The second came last Monday when the city became
the first in the country to require all businesses to provide paid sick leave to their employees. The third
is due in July when the city's plan to require health coverage for uninsured residents kicks in — assuming
the employer mandate portion of the ordinance survives a legal challenge by restaurant owners. A word
to diners: Budget accordingly.
Pelosi: God Bless
the Child that's not at Home. The current rush to increase the Federal Minimum Wage with no regard
for its ultimate impact upon jobs, small businesses and the broader economy only serves to further sharpen the
focus of that beam. It seems that most minimum wage earners are teen and college aged kids of working
families. Subsequently, this red herring regressive wealth transfer accomplishes little but the
subsidizing of middle class children on the backs of small businesses. This is, of course, typical
welfare state thinking and the perfect opening salvo for a new House majority which apparently mistook
America's distaste for war and scandal as a mandate for loony lefty legislation.
Democrats
Prepare to Raise Minimum Wage. It looks like full steam ahead for a significant boost to the
federal minimum wage when Democrats assume control of Congress in January. Sen. Edward Kennedy of
Massachusetts said Thursday [11/16/2006] that increasing the federal minimum wage from $5.15 to $7.25 would
be his top priority as chairman of the Senate Committee on Health, Education, Labor and Pensions.
Democrats
to raise wages for poor workers. The incoming Democratic-led U.S. Congress intends to give a
hand to dishwashers, fast-food cooks and America's other poorest-paid workers by raising the federal minimum
wage for the first time in a decade. … With the new 110th Congress set to convene on January 4,
Democrats vow a vote soon on a bill to raise the minimum wage over two years to $7.25 per hour.
[The writer of the headline above makes the unwise assumption that all minimum wage earners are on
their own, when in reality, many of them live in (and are supported by) middle class households.]
The Right
Minimum Wage. A federal minimum wage is an idea whose time came in 1938, when public confidence
in markets was at a nadir and the federal government's confidence in itself was at an apogee. This, in
spite of the fact that with 19 percent unemployment and the economy contracting by 6.2 percent in
1938, the New Deal's frenetic attempts had failed to end, and perhaps had prolonged, the Depression.
Today, raising the federal minimum wage is a bad idea whose time has come, for two reasons, the first of
which is that some Democrats have an evidently incurable disease — New Deal Nostalgia.
Who Earns the Minimum Wage? Suburban
Teenagers, Not Single Parents. The House of Representatives recently voted to increase the
minimum wage in an attempt to improve the lives of the working poor. Most minimum-wage workers, however,
are not poor. Congress should examine which workers -- assuming that their jobs are not casualties
of the higher minimum wage -- the change would benefit.
New wage boost puts squeeze on
teenage workers across Arizona. Oh, for the days when Arizona's high school students could roll
pizza dough, sweep up sticky floors in theaters or scoop ice cream without worrying about ballot initiatives
affecting their earning power. That's certainly not the case under the state's new minimum-wage law that
went into effect last month. Some Valley employers, especially those in the food industry, say payroll
budgets have risen so much that they're cutting hours, instituting hiring freezes and laying off employees.
Raising the Minimum Wage Will Not Reduce Poverty
for Three Main Reasons: First, the only workers who benefit from a higher minimum wage are those
who actually earn that higher wage. Raising the minimum wage reduces many workers' job opportunities and
working hours. Second, few minimum-wage earners actually come from poor households. Third, the
majority of poor Americans do not work at all, for any wage, so raising the minimum wage does not help them.
Good Intentions Are Not Enough. Few
of those who would benefit from a higher minimum wage are disadvantaged workers. Nor do minimum-wage
workers need the government to step in for them to earn a raise. A higher minimum wage does not reduce
poverty rates, and because of the perverse way that many government aid programs are structured, it will
also do little to help the neediest minimum-wage families.
Minimum Wage Hikes Hurt Unskilled and
Disadvantaged Workers' Job Prospects. Though the majority of minimum wage workers are teenagers
or young adults under the age of 25, the case for raising the minimum wage focuses on how it will help
low-income adults who are struggling to get by. But businesses change their mix of workers when the
minimum wage rises. If they must pay higher wages, companies hire more highly-skilled and productive
workers. Poor, low-skill workers thus lose out.
Do Minimum Wage Increases Benefit Workers
and the Economy? The job-killing effect of higher mandatory minimum wages is well documented.
As Alex Adrianson of The Heritage Foundation points out: "Raising the minimum wage increases the prices
of goods produced by minimum wage workers. Consumers respond by buying less, and employers respond by
making less, which means fewer jobs. Employers also respond to relatively more expensive labor by
investing in labor-saving technology, which again means fewer jobs."
Minimizing the Harm of the Minimum
Wage: The minimum wage is an extremely ineffective anti-poverty measure. It does not help
the poor, low-income workers its supporters often invoke. Contrary to the stereotype, most minimum wage
workers do not need government assistance. Less than one in five live below the poverty line, and the
average family income of a minimum wage earner is almost $50,000 a year. Very few minimum wage workers
support a family with their earnings — fewer, in fact, than in the population as a whole.
Minimum wage workers are far more likely to be teenagers or college students than single parents working full
time. The majority of minimum wage workers are between the ages of 16 and 24, and over three fifths
work part time.
The Negative Effects of the Minimum Wage: Various
state legislators and interest groups around the United States are pushing for increases in the minimum
wage. In California, for example, even Republican Gov. Arnold Schwarzenegger now advocates raising
the state minimum wage from its current $6.75 an hour to $7.75 by July 2007. But when the minimum
wage law confronts the law of demand, the law of demand wins every time. And the real losers are
the most marginal workers — the ones who will be out of a job.
How To Cook The Numbers
101. David Hogberg examines a study the left often cites as proof that increasing the federal
minimum wage won't harm employment. House Majority Leader Steny Hoyer, in a speech supporting an increase
in the minimum wage, claimed, "According to one recent study small business employment grew more between 1997
and 2003 in states with a higher minimum wage than in those adhering to the federal minimum wage." ... That
"study" was conducted by the liberal Fiscal Policy Institute. It is a textbook case in cooking the data.
Why
a Higher Minimum Wage Is Bad Economic Policy: If you want to know why the Democrats keep
treading water in spite of an unpopular president and the feckless pork-barrel leadership of congressional
Republicans, look no further than the minimum wage. In a recent move that was about as surprising as
a low-scoring soccer game, Democrats made it clear they will make the minimum wage a central part of their
election strategy next fall.
Minimum wage = minimum
employment. According to the Labor Department, as of 2004, less than 3 percent of hourly
wage workers were paid at or below the federal minimum wage. About half are under age 25, and about a
quarter are teenagers. Less than 2 percent of workers 25 or older get the minimum wage or less.
About 60 percent of these low-wage workers were in the leisure and hospitality industry, primarily food
services and drinking places, where wages are supplemented by tips.
Minimum wage increase
challenged. While most minimum wage earners quickly advance into better-paid positions, a small
group in [any state's] workforce may remain at the minimum wage for extended periods. These employees
are very often high school dropouts or have poor reading skills. They earn the minimum wage because
they offer meager skills, not because their employers are unreasonable. A wage hike might not be so
problematic if lawmakers could also confer new skills along with the increased wages. Voting for higher
wage floors, however, doesn't teach anyone to read, make change or show up to work on time.
Senator Kennedy Ignores the Economic Reality
of Minimum Wage Increases. Senator Kennedy claims that his minimum wage increase is meant
to help hurricane Katrina victims, many of whom are poor minorities. He does not mention that only
8 percent of the beneficiaries from his wage increase will be single mothers, and only 4 percent
will be single mothers in poverty.
Senate defeats Democrats' minimum wage
increase. Sen. Edward Kennedy, a Massachusetts Democrat, unsuccessfully tried to attach the
proposal to a defense authorization bill that is expected to be passed by the Senate in coming days.
Senate
rejects bid to raise minimum wage. "Americans believe that no one who works hard for a living
should have to live in poverty. A job should lift you out of poverty, not keep you in it," said Sen.
Edward M. Kennedy, D-Mass. He said a worker paid $5.15 an hour would earn $10,700 a year, "almost
$6,000 below the poverty line for a family of three."
[Senator Kennedy gives us the example of a family of three, where there is only one wage
earner, and that person makes the minimum wage. How many such families exist,
Senator? Do any of them live in your neighborhood?]
Minimum Rage: When
The New York Times calls your argument "straightforward" and a CNN host calls your opponents' arguments "a lot
of bull," you can probably count the media on your side. That's exactly what Democrats are seeing in the
media's approach to minimum wage increases — an issue designed to turn out liberal voters in at least six
states this fall.
With Minimum Wage on State
Ballots, PBS Pushes Increases. Minimum wage increases will be on the ballot in six states on
November 7. PBS's "Now" took the opportunity to push for broad increases on its October 27
edition, showcasing worker Melone Peyton, who doesn't even earn minimum wage. Conveniently, David
Brancaccio's show left out conservative voices that might have contextualized Peyton's
situation — and added facts about the effects of a minimum wage increase.
House Approves Minimum Wage
Increase. Republicans muscled the first minimum wage increase in a decade through
the House early Saturday [7/29/2006] after pairing it with a cut in inheritance taxes
on multimillion-dollar estates.
Update:
Senate Rejects
Estate Tax / Minimum Wage Bill. The Senate late Thursday [8/3/2006] rejected, 56-42, a bill fusing
the cut in estate taxes with a $2.10 increase over three years in the $5.15 minimum wage. The bill also
would have revived a host of expired tax cuts, including a business research and development credit and
deductions for state sales taxes, college tuition and teachers' classroom supplies.
LAX-area
hotels urged to end fight against 'living wage'. The city's leading politicians called on hotel
owners Tuesday [12/12/2006] to abandon their effort to block a new ordinance that requires hotels near Los
Angeles International Airport to pay a "living wage" valued at $10.64 an hour to their nonunion workers.
Paying the Price: Why the living
wage is an inefficient welfare system. When the first living wage was implemented in Baltimore
in 1994, many people believed it to be a necessary and drastic increase of the minimum wage. … Supporters
of the policy undoubtedly think the living wage helps out their fellow citizens, but unfortunately fail to
realize the unintended economic destruction that would ensue if the living wage were to take effect.
Chicago
Council Passes 'Living Wage' Act. [An] ordinance, which passed 35-14 Wednesday [7/26/2006] after
three hours of impassioned debate, requires mega-retailers to pay wages of at least $10 an hour plus $3 in
fringe benefits by mid-2010. … The minimum wage in Illinois is $6.50 an hour and the federal minimum
is $5.15. Mayor Richard M. Daley and others warned the living wage proposal would drive jobs
and desperately needed development from some of the city's poorest neighborhoods and lead giants
like Wal-Mart to abandon the city.
Who's Really Behind the Anti-Wal-Mart
Campaign? ACORN, a national organization of low- and moderate-income persons, has been around
since the early 1970s. The organization claims about 175,000 member families in 80 cities and advocates
left-wing populist approaches to a variety of issues including public housing, jobs, wages, taxes, and voter
registration. … While advocating living wages, ACORN has opposed paying even minimum wages to its
own workers. This was made apparent back in 1995, when ACORN sued the state of California to be
exempted from paying its own workers the minimum wage.
Minimum Wage Hits $9.50
in Santa Fe. This month, in the liberal bastion of Santa Fe, New Mexico, they are raising the
minimum wage in the city to $9.50 per hour. The measure applies to all businesses with 25 or more
employees. The driving force behind this decision was Acorn, the 'national community organization,' as
Jon Gertner describes it in The New York Times Magazine for January 15, 2006. Acorn has discovered
that the way to win on the minimum wage issue is to cast it not as an economic issue but as a moral issue.
An Increase in the Minimum Wage? On
June 13, the House Appropriations Committee approved a bill that would increase the minimum wage from
$5.15 to $7.25 per hour over the next three years. This bill, with the support of seven Republicans
on the committee, would implement one of the highest priorities of the congressional Democratic leadership.
Edwards
Urges Ohio to Hike Minimum Wage. Former U.S. Sen. John Edwards, a potential 2008 Democratic
presidential candidate, told supporters of a ballot issue to increase the state's minimum wage that a hike
in Ohio would be the first step toward increasing wages across the nation.
Texas inmates not entitled to minimum
wage. Texas inmates working in the laundry of a state prison aren't entitled to earn at least
the federal minimum wage of $5.15 an hour, an appeals court has ruled. Convicted sex offender
Douglas R. Loving contended his job as a drying machine operator qualified him for protection
under the Fair Labor Standards Act — meaning he should get minimum wage — because the act didn't
specifically exempt prisoners.
Three measures to
raise California's minimum wage. Three bills to raise the minimum wage — one
backed by Gov. Arnold Schwarzenegger and two by Democrats — face tests this week in the
Legislature. The bills would boost the hourly minimum wage by $1 to $7.75, making it one of
the highest — if not the highest — in the nation.
California boosts minimum wage
to the highest in US. The California Assembly on Thursday [8/31/2006] approved a bill to boost
the minimum wage to $8 an hour, the highest level in the nation, and sent it to Gov. Arnold Schwarzenegger's
desk for signing.
Minimum wage,
war top Democrats' plans. Democrats say they will burst out of a 12-year exile with a bang
if they win control of Congress in two weeks. They promise to quickly pass a minimum wage increase
at home and to reduce the U.S. war role in Iraq.
The imps of the
impoverished. The living wage is the new-and-improved "poverty line," the theoretical
wage that would allow a worker to live in middle-class comfort, paying the bills and accepting no
special subsidies. The minimum wage, on the other hand, is a legal barrier to trade in
labor. It's not theoretical at all. It's the law.
Minimum Wage,
Maximum Folly. About a fortnight ago, Mrs. Williams alerted me to an episode of Oprah Winfrey's
show titled "Inside the Lives of People Living on Minimum Wage." After a few minutes of watching, I
turned it off, not because of the heartrending tales but because most of what was being said was dead wrong.
Below
the minimum wage: The Internet leaves no excuse for guessing about what is "probably"
true. Just type "Statistical Abstract" into Google, and then click on Section 12, Table
636: "Workers Paid Hourly Rates." Table 636 reveals that only 520,000 were
paid the $5.15 federal minimum wage in 2004. … Nearly three times as many U.S.
workers (1,483,000) were paid less than the minimum wage.
A Worst-Case Scenario for Federalism:
Massachusetts
and the Minimum Wage. Supreme Court Justice Louis Brandeis' conception of
individual states as "laboratories of democracy" would aptly describe Massachusetts should
its legislature pass a bill raising the state minimum wage from $6.75 to $8.25. Sadly,
this is one experiment destined to go up in smoke. … Unfortunately, there are no winners
with the minimum wage. The resulting increase in unemployment, taxes, consumer costs
and crime touch all rungs of the social ladder.
The Effects of the Proposed Ohio
Minimum Wage Increase. In recent years, the movement to enact "living wages" or
increases in the minimum wage has been active in states and cities across the
country. Advocates of these wage hikes argue that the increases will help
low-income families escape poverty. Although emotionally compelling, this argument
ignores the unintended consequences the proposed increase would create. Worse, the
mandated increase confers its benefits overwhelmingly on employees who aren't poor whereas
those who are bear a disproportionate share of the costs.
Schwarzenegger
Seeks $1 Minimum-Wage Boost, Aide Says. California Governor Arnold Schwarzenegger will
propose a $1 increase in the minimum wage for the most populous U.S. state, reversing a position he
took in two vetoes, a member of the governor's administration said.
Senator Kennedy
Ignores Economic Reality of Minimum Wage Increases. Senator
Kennedy claims that his [proposed] minimum wage increase is a family issue
because many of the beneficiaries are women with children. He does not
mention that only 8 percent of the benefits from his wage increase will
be single mothers, and only 4 percent will be single mothers in poverty.
Minimum
wage, maximum folly. Senators Edward Kennedy, D-Mass., and Rick Santorum, R-Pa.,
both introduced proposals to increase the minimum wage from its current $5.15
an hour. Sen. Kennedy's proposal would have raised the minimum wage
to $7.25 in three steps over 26 months, while Sen. Santorum's would have
raised it to $6.25 in two steps over 18 months. Two weeks ago, both
measures failed passage in the Senate.
Something
for nothing: Part III. Minimum wages in South Africa have been set higher than
the productivity of many workers, so employers have no incentive to hire those workers, even though
such workers are perfectly capable of producing much-needed goods and services.
The Minimum Wage Trap: The
latest research has shown that increases in the minimum wage encourage high school students to
drop out – enticed by the lure of higher pay for unskilled work. This reduces
their lifetime earnings and displaces lower-skilled workers at the same time. Given these
kinds of effects, it is not surprising that the minimum wage has almost no impact on poverty or
on increasing the incomes of the poor.
Minimum
Wage Increase: Help or Hype? Massachusetts Senator John Kerry, like other
liberal politicians, is once again calling for an increase in the minimum wage. The
Kerry plan calls for a 36 percent increase to seven dollars an hour. He says it
will help those living in poverty. Like all liberal ideas, it sounds good at
first. [But] increasing employee costs means staffing cutbacks and reduced hours.
Editor's Note:
Just for future reference, Ralph Nader supports a $10-an-hour minimum
wage.* Why
stop there? Why not make it $20 an hour?
Abolish the Minimum Wage. A
minimum wage helps no one. Except for the politicians who propose it in an
effort to look "sensitive to the need of the poor." After all, we need to help
these poor people, and get them all the money we can. What does the minimum wage
actually do? It causes unemployment. Economists don't agree on much,
but this is one thing they do agree on. When you require employers to pay a
minimum wage, any worker whose labor is not worth that wage is fired,
or never hired to begin with.
Raising the Minimum
Wage: Another Empty Promise to the Working Poor. Since its
inception in 1938, increases in the federal minimum wage have become an increasingly
weak mechanism for addressing the problem of poverty in America. This continuing
deterioration stems from the fact that fewer low-wage employees are supporting a family
on a minimum wage income. As poverty becomes more a problem of hours worked and
not an individual's wage level, anti-poverty policies that focus on wages will be less
efficient than polices that focus on income, such as the Earned Income Tax Credit.
The Minimum Wage Is Bad Policy. The
concept of a minimum wage seems straightforward: If we believe the wages of
some workers are too low, we should pass a law requiring those wages to be higher. What
could be simpler? The problem is that increasing the minimum wage may make some people
better off, but others will be harmed. Experience proves that the minimum wage
hurts more people than it helps. A bill to raise minimum hourly pay is introduced
in every Congress. The current proposal would immediately raise the federal minimum
wage from $5.15 to $5.85, then to $6.45 one year later and to $7.00 after two years.
When more is
less. Contrary to a universal confusion between words and reality, those paid
the official "minimum" wage are not the nation's lowest-paid workers. The federal
minimum wage does not apply to those working on small farms or at seasonal amusement or
recreational establishments. It does not apply to newspaper delivery people, companions
for the elderly, outside salesmen, U.S. seamen on foreign-flag ships, switchboard
operators or part-time babysitters.
The
illusions of the minimum wage: Although you can force employers to pay their workers
more, you can't force them to employ people. If you raise the tax on cigarettes by $2.10 a pack,
people will smoke fewer cigarettes. The minimum wage functions as a tax on hiring low-wage workers,
which means companies will look for ways to do without them. Economists have always taken this
effect as an unfortunate reality.
Why the Minimum Wage Law Causes
Unemployment: Supporters of a higher minimum wage also frequently imply that a
large portion of minimum wage workers are single mothers for whom welfare is an alternative
to work. However, this belief is also disproven by the facts. Single parents,
male and female, make up only 6.5 percent of the minimum wage workforce. Only about
half of them work full time. The number of poor people earning the minimum wage is small in
part because most poor people of working age are not working. Only 9.2 percent of poor people
of working age have full-time jobs. About 60 percent do not work at all.
Minimum
wage realities: I've always thought that the minimum wage was perfect
liberal economics, in the sense that it perfectly encapsulates the liberal
philosophy. Liberals see a problem: workers with low wages. Their
solution: pass a law requiring those wages to be increased. What could be
simpler? The problem, of course, is that someone has to pay those higher wages,
and the money doesn't come from the tooth fairy.
Wage growth among minimum
wage workers: Contrary to popular belief, minimum wage employees are not
dependent on government policies to increase their wages. Higher education and job training
along with a strong labor market are significant contributing factors.
Hurting the poor in the name
of helping them: History shows least-skilled workers suffer when the minimum
wage goes up.
Does the Minimum Wage Reduce
Poverty? This study by economists Richard Vedder and Lowell Gallaway shows
convincingly that minimum wages, because of inefficient targeting of the poor and unintended
adverse consequences on employment and earnings, are ineffective as an antipoverty
device. The report relies on an impressive array of empirical evidence showing
that, however one views the data, in the United States, state and federal minimum wages
have not reduced poverty.
The Minimum
Wage Employee Profile: There are more than 550,000 teens working at the minimum
wage who live in households where family income exceeds $30,000. Only 44% of minimum
wage employees work full time. The majority of minimum wage employees could increase
their income simply by working more hours. Single parents with three or more children
account for only 1% of the minimum wage work force, and only 57% of these single
parents work full time.
Minimum Wage Laws and
the Distribution of Employment: Kevin Lang's paper focuses on employment
in eating and drinking establishments, a Bureau of Labor Statistics classification including
fast food and table service restaurants, as well as cafeterias. The report shows that the
effect of higher minimum wages in the late 1980s was to displace adults employed in food
service in favor of younger workers.
The New York
Times and the minimum wage: For decades, the New York Times had carefully and
consistently editorialized against the minimum wage. But five years ago, for no
apparent reason, it reversed a policy dating back to 1937 and suddenly endorsed a
higher minimum wage.
High
Minimum Wage = High Unemployment. Washington state is not alone
in experiencing perpetual high state unemployment. Oregon, Washington
and Alaska are among the five states with the highest unemployment
rates. It is perhaps no coincidence that these three states have the highest
state minimum wages in the nation.
Repeal the Minimum
Wage. To put it bluntly, given all the evidence we have about the destructive
effects of the minimum wage law, anyone who still calls for an increase in it is either sadly
lacking in economic education or is a demagogue.
Bifurcated bias lens:
In the U.S., the Davis-Bacon Act of 1931 (still on the books), a super minimum wage law, was enacted to protect
unionized white construction workers from competition with black workers. … Minimum wage laws lower the
cost of, and hence subsidize, racial preference indulgence. After all, if an employer must pay the same
wage no matter whom he hires, the cost of discriminating in favor of the people he prefers is cheaper.
Discrimination: The
Law vs. Morality. A discussion racial discrimination associated with the
minimum wage and the Davis-Bacon Act, which was enacted in 1931 and is still
in effect today.
The fallacy
of the prevailing wage. In its contempt for the market, the federal government
is setting high wages that keep people poor. … Construction had long been the kind of
work where young people could break in by helping, watching and working cheap until they
acquired skills. The Davis Bacon Act eliminates that.
"Living wage"
kills jobs. Give credit where credit is due. The political
left is great with words. Conservatives have never been able to come up
with such seductive phrases as the left mass produces.
Senator
Ted Kennedy's Minimum Wage Foolishness: During a
period of job losses and poor business investment, Senator Ted Kennedy
wants to make it more expensive to create jobs. The Massachusetts
Democrat has proposed hiking the minimum wage by a whopping 29%,
from $5.15 per hour to $6.65.
The Complex Dynamics Of Raising The Minimum
Wage. The problem of elevating the welfare of the country's lowest-paid workers
is far more complex than minimum-wage proponents would have us believe. A minimum-wage
hike does not, and cannot, translate into a long-term improvement in welfare. The small number
of job losses resulting from past minimum-wage increases is not an argument for another
round of wage mandates. Rather, it is testimony to the fact that politicians do not have
the market clout they think they have.
Effects
of Minimum Wages on Teenage Employment, Enrollment and Idleness: Changes
in the minimum wage, often thought to affect only aggregate employment
levels, are now known to have impacts both in and outside the labor market. Inside
the labor market, higher minimum wages affect the composition of the minimum wage
work force, reducing the employability of less skilled workers. At the same time,
higher minimum wages may accelerate the rate at which youths terminate their formal schooling.
Minimum
Wage Woes: It doesn't take a Nobel economist to figure out that an
employer isn't going to hire someone he can't afford. Labor Department statistics
show that a high percentage of those receiving the lowest pay are part-time workers
who aren't supporting a family. Three-fifths are between ages 16 and 24.
Minimum
wage FAQ: Who earns the
minimum wage? Young people living with their parents
account for 37.6% of those who benefited from the 1996 minimum wage hike.
Winners
and Losers of Federal and State Minimum Wages: During
recent minimum wage and living wage debates, it is often
heard that there is no job loss attached to a mandated wage
increase. A majority of economists question the "no displacement"
theory, but many policymakers and their constituents believe this
theory to be true. Contrary to popular opinion, mandating a higher
minimum wage comes at a cost. But what if, despite a credible body
of economic research to the contrary, there is no job loss following
a mandated wage hike? In this study, economists Thomas MaCurdy and
Frank McIntyre of Stanford University answer that question. They find
that the cost does not disappear. In fact, by some measures, it hurts
the poor the most. Moreover, a vast majority of poor families pay this
cost despite receiving no benefits from the wage hikes.
Is it Better to Have a Raise or a
Job?: Why a minimum wage hike would increase unemployment and harm
undertrained workers.
Making
the Underclass Permanent: I will never forget the words of the
man who ultimately became my stepfather, "Walter, any job, at any wage is better
than begging and stealing." Government handouts and a flourishing drug trade
weren't around to corrupt that lesson.
The Living
Wage Folly: Living-wage ordinance campaigns undertaken at private
firms are modeled after the old union "corporate campaigns" of the 1970s and
1980s. They involve concerted efforts to ruin the reputations of those who do not
surrender, as well as picketing, demonstrating, boycotting, and other forms of
harassment. All, of course, in the name of "social justice." In all settings other
than labor such actions are called extortion.
Unreal
wages: Many of the most persistently gloomy reports about the U.S. economy
have long been based on the single most misleading statistic the government produces.
Senator
Kennedy Gears for Minimum Wage Battle. As soon
as they can secure passage of a "Patients Bill of Rights" and bring about a
version of education reform, congressional Democrats are gearing to start a
battle on a minimum wage increase.
"Living Wage" Law Is Public Policy at its
Worst: On November 3, 1998, Detroit voters overwhelmingly approved a so-called "living
wage" ordinance. Effective January 1, 1999, it requires employers with at least $50,000 in city
contracts or financial assistance to offer workers a minimum hourly wage of $8.23 if health benefits are
included, or $10.28 if they are not. Furthermore, the law requires that employers hire only city
residents. Violators are subject to a $50-per-day penalty and may have their city contract or grant
revoked as well. The city's already-bloated bureaucracy will get larger now because contracts will have
to be monitored for compliance, which also means that businesses will be forced to reveal confidential payroll
information. This is public policy at its worst.
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