High minimum wage means jobs losses for working families

There's a smart, well-reasoned editorial today in the Yakima Herald-Republic on the minimum wage - a topic that is usually debated with more emotion than common sense.  The Herald-Republic editors talk reasonably about the economic effect of tying minimum wage policy to an automatic escalator, increasing it by formula every year no matter what is happening with the economy.  Despite a softening job market, the law will force Washington's minimum to go to $8.55 an hour on January 1st.

Most people don't know that the minimum wage is a price control.  Like all price controls, it reduces supply; in this case, resulting in fewer jobs.  Naturally the burden of job loss fall disproportionately on the most vulnerable; low-skilled and minority workers.  A Cornell University study found that, "a 10% increase in the minimum wage causes four times more employment loss for employees without a high school diploma and African American young adults than it does for more educated and non-black employees."

The poor, the homeless, teenagers, young workers and low-income families are the first to be hurt by rising unemployment.  When the law artificially increases the cost of creating jobs, low-skilled workers are the first to be priced out of a shrinking job market.  The minimum wage is not meant to support a family; 85% of people earning the minimum are either single or bringing a second income to their household.  Losing a minimum wage job is like imposing a pay cut on low-income working families.  In good times the high minimum wage is not noticed so much, since its job-killing effects are overwhelmed by rising prosperity, but as the country slides into recession, we can expect it to hit harder and last long in Washington than in other states.

Comments

[Elaine]

OK we know liberals believe that everyone has the right to a "livable wage" as they call it. But just as with so many of their well intentioned policies, mandating a minimum wage serves only to mandate no wage. Why can't they understand this? Why can't they understand that the more government sticks its nose into forcing people to do stupid things everyone is worse off? Is there some kind of faulty gene in liberals that blocks common sense?

[ba]

Back up your claims with some sources. Let's see a link to that Cornell University study you cite, or your statistics about the number of singles earning the minimum wage.

And by the way, a cost-of-living adjustment isn't a wage increase because by definition, the cost of other goods and services have also increased.

Elaine, a livable wage is much, much higher than the current minimum wage. No one - single or married - is getting fat and happy off $8 an hour. Try it, and you'll see why.

[Career Search]

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