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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.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

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.

  • John Kascak

    Since Unions only make up only 8% of the private workforce why are they even in the discussion? It’s about time people stop using unions as an excuse for failed business practices.
    Hostess bakers made 45000 in ’05 took pay cut to save company to 35000. Then co bought out were asked to take another 8000 this year to save co. meanwhile management got large bonuses. In 5 more yrs no unions then who do you blame?

  • LD


    It is not simply the unions per se.

    It is the pols who are tied at the hip with the unions. The pols are advancing this legislation and they are the ones in the hip pockets of the unions.

    A crony cabal.


  • Jim

    But when i was turning channels the other night past cnbc (apparently not fast enough) i heard al sharpton say very matter of factly that “it’s not a big deal, it’s only a little bit of money”!

    Then i told my kids to call the pool manager asap about their summer lifeguard jobs because he might not be hiring as many kids this year… Then i showed them the math…

    Then they called!

  • Small BD

    After 25 – 30 years of wage stagnation, it is rather astonishing to hear that our great nation would fall if the minimum wage were to go up a bit.

    Corruption (lobbying) has metastasized and created deep systemic problems. Union influence has dramatically diminished (in what country were your socks made?). Demonizing unions, democrats, republicans or the estate tax is political cliche, not a solution to anything.

    People are laid off for the purpose of adding a penny to quarterly earnings, providing hefty underwriting fees & bonuses for ill-conceived mergers, or saving on cheap foreign labor. At least with a mandated wage increase, the excuse for layoffs wouldn’t look so bad.

    The phenomenon of the working poor and medically bankrupt is a national disgrace.

    Here’s my version of Economics 101: “Though shalt not muzzle the ox when he treadeth out the corn.”

  • dalecarville

    The Employment Policies Institute is a front group for low wage employers.

    Talk about trojan horses!

    If your argument had merit you wouldnt need to use industry propaganda to make it.

    Econ 101? Lets talk about Journalism 101.

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