Raising the Minimum Wage is the Worst Idea Ever

President Obama wants to pass a minimum-wage hike by the end of the year and the Senate, which will soon vote on the so-called Fair Minimum Wage Act to raise the federal minimum from $7.25 to $10.10 an hour, is poised to do his bidding. Supporters claim that the “compassionate” regulation would boost the wages of low-income workers. At first glance, that sounds great! Who doesn’t want to get a raise? But as the late economist Milton Friedman said, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.”

Who is the “arbiter of fairness” that decided no person should be permitted to work for under $10.10 an hour? Why not $15? $18? $50? Even some strong advocates of the minimum wage understand the dangers of a “too high” minimum wage. They recognize that certain people can’t get hired at $50 an hour. But what about the people who have trouble getting a job at $10.10? 

In theory, the minimum wage is supposed to help the poor. But in a study conducted by the American Action Forum found that only 1.5 percent of people in families with incomes below the federal poverty line earned a wage at or below $10.10 an hour. Who is the largest demographic of minimum wage earners?Teenagers from middle class families. Most people with minimum wage jobs are young and unskilled.

Some of these minimum wage jobs might not be the most glamorous in the world. (I scrubbed toilets at a greasy pizza shop for $5.15 an hour when I was 15.) The purpose of the majority of these entry level jobs is for people to gain skills and work experience to climb up the career ladder.

And let me tell you, it wasn’t easy getting my first job cleaning up unspeakable things from the public bathroom stalls. My resume was blank. I had no real job experience or even a high school diploma. The other restaurants and retail shops in town told me: “Not interested. Thank you.” How am I supposed to get job experience if no one is willing to hire me because I have no experience? 

I just wanted a job. A job that pays money was better than having no job at all. When I finally got one, I was happy to finally have something to add under “job experience” on my resume. And that job experience made it possible for me to get better-paying jobs down the road. 

It’s misleading to say that most people are “stuck” in minimum wage jobs. An Employment Policies Institute study showed that about two-thirds of all minimum wage earners get a raise within the first 1 to 12 months on the job. These raises in wages happen without government legislation. As people gain valuable skills, employers are inclined to increase their wages to keep them around and not looking for other jobs. 

There is a strong correlation between youth unemployment and minimum wage hikes. Many inexperienced teenagers won’t be able to get a job if the minimum wage increases. Fewer employers will be willing to get a chance on them. Some people will get fired. Countless employers won’t be able to afford paying unskilled workers a higher wage. 

The teenage unemployment in the United States is about 23.7 percent. For black teenagers, unemployment is a shocking 41.6 percent. That does not even include the teenagers who have given up looking for jobs. Do we really want to implement a law that prevents these young people from getting their start? 

Not all minimum wage earners are young people. Some are mothers that are entering the workforce for the first time to provide a second income to their household. Some are recent adult immigrants that are not yet fully fluent in English. Any hike in the minimum wage will make these people susceptible to layoffs. Particularly in the latter case, some people will opt to illegally work under the table for less than minimum wage. 

In spite of good intentions, increasing the minimum wage will have disastrous effects on the economy. The people it’s supposed to help will be worse off if they can’t even get a job to pay their bills.

Julie Borowski is a Policy Analyst at FreedomWorks, an organization dedicated to lower taxes, less government, and more freedom. 

Showing 6 reactions

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  • commented 2013-12-18 18:51:38 -0500
    For anyone who is interested, here is a great minimum wage debate between liberal and libertarian economists: http://youtu.be/7PcOfs_phE8
  • commented 2013-12-18 15:55:12 -0500
    Why not 20 or 50? Because the political motivation isn’t there yet.

    But to reverse the question, why not 5 cents an hour? Why not, no minimum wage?

    If you think making less is great then why not a free labor economy? Why not allow young people to indenture themselves to companies? Why not allow them to get paid in company script and use this “currency” to buy all their needs from the company store and if their needs exceed their income they can just borrow from the company?

    It is wrong to view the minimum wage hike as as giveaway to people without skills or work ethic. What it will do is cause upward pressure for all wages. Those making 12 an hour will have the impetus to ask for more money and the same for those making 20.

    Upward wage pressure on the lowest incomes is desperately needed in this country. Sadly, the only wages that have been going up have been at the top.

    But hey, that’s cool. I know I probably haven’t convinced you or anyone conservative. But do me a favor, next time you think you are about to complain that 50% of Americans don’t pay income taxes try instead to shut the flip up. There’s a reason they don’t pay income taxes. It’s because the wages they earn don’t exceed the poverty line because wages at the bottom haven’t been going up.

    Kay Thanks.
  • commented 2013-12-18 13:40:38 -0500
    Fuji wants to parrot the party-line foolishness, that has been repeatedly DISPROVEN. Ben Pierce wants to throw a bone to the union-busters.

    Neither are worth the cyberspace they inhabit. BUT, they are worth slightly more than Julie Borowski, who can’t even be useful as a bad example. I thought Michele Bachmann was bad…….

    No OTHER time in history has raising the minimum wage destroyed the economy, nor will it do so now. This is another pathetic attempt to smear Obama’s attempts to better the nation.

    Thanks to the ‘Great Recession’ of ‘08, these “better paying jobs” she refers to DON’T exist anymore. And, really —getting a raise on a minimum wage job makes it NO LONGER THAT? SUCH UTTER TREACLE! And minimum wage jobs are for gaining work experience? How about all these McDonald’s jobs that are now being filled by displaced young professionals instead of high schoolers? Now we have husbands/fathers and wives/mothers slinging fries, and teen children with nothing to do and nowhere to do it. Sounds ‘SPLENDID’ for our collective future.

    Condemn W for leaving us a $10B bill for two immoral wars, accept that we have to do some spending to save a flushed economy, and get on board with ACTUALLY CREATING some new jobs — UNLIKE what the 1% claim they do, and COULD have done for a decade under favorable tax rules, and DID THE OPPOSITE.
  • commented 2013-12-18 13:33:29 -0500
    Increasing minimum wage, simply means increasing cost to the consumer, who just received the increase in minimum wage. What’s the point ??
  • commented 2013-12-18 12:47:57 -0500
    I’ll post this on your Facebook page, but many union contracts also include a wage increase clause in the event of a minimum wage increase. http://www.unionfacts.com/article/wp-content/uploads/2013/02/Union_Minimum_Wage_report.pdf
  • commented 2013-12-18 10:53:17 -0500
    The sheeple don’t care that the cost of everything will increase to counteract their wages. They are sheep.