Uncivil Rights

Thanks to Ogre, Ogre's Politics and Views for his post,Minimum Wage Rules, on The Wide Awakes.

Minimum wage is compassion on the part of the liberals. It's easy for them to support a bad policy such as this because they fail to look at the unintended consequences involved, artificially high prices on goods and services. Sure it raises the buying power of those affected; it has to because it also raises the cost of living. That is simple supply and demand economics.

Liberals must be aware of the consequences of their actions (Iknow, it would be a first). But, I guess when you're buying votes, facts don't matter.

So who will benefit from raising the minimum wage? In this article,"WHO WILL REALLY BENEFIT FROM SENATOR KENNEDY’S $7.25 MINIMUM WAGE?" from Employment Policies Institute, clearly dispells any myth that increasing the minimum wage helps the poor.

3/3/05, Washington – As Congress weighs a hike in the federal minimum wage to $7.25, Senator Ted Kennedy (D-Mass.) and supporters of an increase suggest that the typical minimum wage employee is struggling to raise a family on a single income. The Employment Policies Institute (EPI) notes that U.S. Census Bureau data strongly dispute this portrait as simply untrue. Furthermore, the vast majority of the benefits of such an increase will not reach its intended target—working families.

Who will be helped? Who makes minimum wage now?

An analysis of data compiled by the Census Bureau’s Current Population Survey shows that the average family income of employees who would benefit from a minimum wage increase to $7.25 is nearly $42,000 a year. Why? Because fully 85% of employees whose wages would be increased by this proposal either live with working parents or another relative, live alone, or have a working spouse.
Additionally, the majority of potential beneficiaries do not work full-time, and nearly 25 percent don’t even work 20 hours a week. Fully half of all beneficiaries are 25 years old or younger.

Just 15% of beneficiaries will be sole earners in families with children, and each of these sole earners has access to supplemental income through the federal and state earned income tax credit (EITC).

Of U.S. employees affected by the proposed $7.25 minimum wage:

· 41% of minimum wage earners live with a parent or relative · 21% of minimum wage earners are a dual earner in a married couple · 23% of minimum wage earners are a single earner with no kids · Just 15% of minimum wage earners are single parents with kids or a single earner in a couple with kids, and each of these sole earners has access to supplemental income through the EITC.

In this article, Employment and the Minimum Wage, Alaska is the focus and demonstrates even in a high growth market, the minimum wage increases unemploymentas shown by this graph:

This graph illustrates that minimum wage increases will affect roughly 7.5% of the total workforce in the U.S.

Even a study ordered by Bill Clinton showed that the minimum wage decrease emloyment. In this study, Statement on The Impact of Federal Minimum Wage Increase on Small Business the minimum wage demonstrates and adverse effect on employment and small business. A few tidbits:

In 1981, the congressionally-mandated Minimum Wage Study Commission concluded that a 10 percent increase in the minimum wage reduced teenage employment by 1 percent to 3 percent.

A review of the Card study of California by Professor Lowell Taylor of Carnegie Mellon University found that the state minimum wage increase had a major negative effect in low-wage counties and for retail establishments generally. Thus Nobel Prize winning economist Gary Becker of the University of Chicago concluded that "the Card-Krueger studies are flawed and cannot justify going against the accumulated evidence from many past and present studies that find sizeable negative effects of higher minimums on employment."

The fact is that virtually every major study that has ever been done has found significant job losses from an increase in the minimum wage, with the rare exception of those done by Card and Krueger. (Krueger served as chief economist for the U.S. Department of Labor under Robert Reich.) A survey of earlier studies by the U.S. General Accounting Office in 1983, for example, "found virtually total agreement that employment is lower than it would have been if no minimum wage existed."

Research also shows that the minimum wage increases welfare dependency. A recent study by Peter Brandon of the University of Wisconsin, for example, looked at welfare rates in states that increased their minimum wages in the 1980s with those that did not. In those that did, the average time on welfare was 44% higher than in states that did not. Much of the reason is due to reduced employment opportunities for welfare mothers. In states not raising the minimum wage, half of welfare mothers worked during the years surveyed, while in states that raised the minimum wage only 40% reported working.

Intuitively one would have expected a higher minimum wage to make work more rewarding for those on welfare. However, the interaction of the welfare and tax systems means that some working people are actually worse off after an increase in the minimum wage. Economist Carlos Bonilla of the Employment Policies Institute found a dramatic example of this in California after the minimum wage rose from $3.35 to $4.25. After accounting for the phase-out of AFDC (Aid to Families with Dependent Children), Medicaid, and food stamps, and federal, state, and local taxes, it turned out that a single parent earning the minimum wage was $1,800 per year worse off after the increase than before.

The case against the minimum wage is strong. In fact, it should be abolished. Even the New York Times, that bastion of liberalism, has said so. As the headline on its January 14, 1987 lead editorial put it: "The Right Minimum Wage: $0.00." Indeed, according to Professors Robert Meyer of the University of Chicago and David Wise of Harvard, abolition would actually increase the aggregate income of youth in this country. Raising the minimum wage simply moves us further in the wrong direction.

The studies have been done, and the facts are in. For years the data have shown the minimum wage is bad, bad policy, bad for workers, bad for the economy. Do Democrats learn from history, or facts, or logic? Of course not because the thought of increasing someone's wages, even to the detriment of that worker, the business, and the economy, menas votes. But let's try one more time, to all the liberals, THE MINIMUM WAGE DOESN'T WORK! Unintended consequences, please watch your unintended consequences.

Cross Posted at Blogger News Network and The Wide Awakes.