Raising Minimum Wage: A Trojan Horse Disaster
Posted by Larry Doyle on March 14, 2013 10:00 AM |
A few weeks back, I described raising the minimum wage as a jobs killer.
Readers chimed in and addressed the fact that the real beneficiaries of raising the minimum wage are the unions that often have wage contracts benchmarked to the minimum wage, and that the raising of this rate is really a Trojan horse.
So the question begs, if raising the minimum wage is, in fact, a Trojan horse, just how many people might be negatively impacted in terms of losing their job if it were to be raised? Let’s navigate and review a release by the Employment Policies Institute that highlights the following:
the Employment Policies Institute (EPI) will release a new policy brief and a full-page ad showing the serious flaws behind Senator Tom Harkin’s (D-IA) and Representative George Miller’s (D-CA) bill to raise the federal minimum wage to $10.10. If passed, the bill could kill up to 988,000 jobs.
The Senate Committee on Health, Education, Labor, and Pensions will hear testimony on this bill (S. 460/H.R. 1010) at 10 a.m. this morning.
The policy brief, which previews results from a forthcoming EPI report, can be viewed here. The full-page ad can be viewed here.
“The economic research is clear that a higher minimum wage will reduce employment without reducing poverty,” said Michael Saltsman, research director at the Employment Policies Institute. “A $10.10 minimum wage is a dead-end, especially for the 25 percent of our country’s teen labor force that can’t find work.”
In a forthcoming report, EPI analyzes Census Bureau data and finds that the average family income of a minimum wage earner affected by this bill is $52,396. Thirty-five percent of recipients are people who live at home with their families or relatives. Only 9 percent of affected minimum wage earners are single parents, and their earnings are already above the minimum wage thanks to the Earned Income Tax Credit.
The report also finds that tipped restaurant employees already earn an hourly average of over $13.00 (with tips included). The Harkin/Miller bill would raise the cost to employ them by as much as $10,275 per year.
Additionally, EPI’s full-page ad in tomorrow morning’s Roll Call highlights how Harkin, Miller, and President Obama have hypocritically relied on unpaid interns themselves, even while demanding that private employers pay more for the cost of entry-level labor.
“Minimum wage hikes hurt the very people they’re intended to help, and a $10.10 wage is no exception,” concluded Saltsman. “If the President and his allies in Congress want to boost the economy and have a positive impact on the country’s unemployment and poverty rates, they need to lower barriers to hiring—not raise them.”
Principles of Economics 101 . . . as was then and forever shall be.
Not that many in Washington are astute enough to understand the basic principles, but let’s look inside this horse before we roll it out onto the American economic landscape.
Who is really inside this Trojan horse and what exactly are the real motivations and the subsequent impacts in pushing this horse$h!t legislation forward?
Remain on guard . . . and navigate accordingly.
I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.