Minimum Wage Folly
Congress is contemplating raising the minimum wage yet again, from $5.15 to
$6.15 - a step that even most proponents concede will destroy numerous
entry-level jobs.
Here's some recent commentary on that proposal.
From Doug Bandow, Senior Fellow at the Cato Institute:
"No serious economist doubts that the minimum wage destroys jobs. The only
question is how many. Economists Richard Burkhauser, Kenneth Couch and
David Wittenberg estimate that every 10 percent increase in the minimum
reduces employment by between 2 percent and 6 percent. They figure
Congress' 1996 minimum wage hike cost between 153,000 and 457,000 teens
their jobs."
From Robert Rector, Senior Research Fellow at the Heritage Foundation and a
leading authorities on U.S. poverty statistics and the U.S. welfare system:
"FACT: Increasing the minimum wage is not an effective way to reduce
poverty or change the distribution of income. The popular belief that
minimum wage workers are poor adults working full-time, year round, and
trying to raise a family is simply untrue. An analysis of March 1999 Census
Bureau data shows that:
- Of workers who would be affected by a minimum wage increase from $5.15
to $6.15 per hour, over half are either teenagers or young adults under 25;
a third are enrolled in school; nearly three-quarters are single; and only
7.4 percent are poor family heads.
- The median family income of those who would be affected by a minimum
wage increase from $5.15 to $6.15 per hour is $33,000. Nearly 60 percent
have household incomes two or more times the poverty level."
From Edward H. Crane, President and Founder of the Cato Institute:
"[T]he average income of minimum-wage workers increases by 30% within one
year of employment on the basis of learned skills. Which is why any
artificial barriers to learning those skills - which is what the minimum
wage is - represents a cruel hoax to the working poor. Wage increases due
to increased skill levels explain the remarkable fact that only 2.8% of
workers over the age of 30 are receiving the minimum wage."
(Sources: Cato Institute; Heritage Foundation)
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