Why I Am Against the Suggested Increase in the Minimum Wage

Raising the federal minimum wage, especially for the reasons put forth by many supporters, is a mistake.  President Obama proposed a 39.31% increase of the federal minimum wage during his State of the Union speech and this proposed wage hike is bad for business, bad for workers, and bad for our country.

If this drastic increase becomes law, employers will simply pass this increase on through higher prices for consumers, decreased training opportunities for current employees, and fewer employment opportunities for lesser-skilled and inexperienced workers.  I wonder, do you think many people will favor a proposed minimum wage hike if it meant higher prices for milk at the grocery store, a more expensive Big Mac, and latte prices far north of $5 at Starbucks?  In addition, would the proponents of an increased minimum wage still support this increase if they realized that it would result in employers offering fewer training opportunities for the workers earning the federally mandated minimum wage?  Research suggests that employers will look to implement tactics such as these in an effort to cut employment costs.  Finally, there are many studies that indicate that even a 10 percent increase in the minimum wage can result in reduced employment for low-skilled workers by 1 to 3 percent.  I do not believe this is what many of the supporters of the $10.10 minimum wage have in mind.

Frequently I hear advocates for an increased minimum wage speak of the need for hourly wage earners to be able to support a family.  In fact, I hear all sorts of claims that are simply not backed up facts.  Here is a link to a US. Department of Labor, Bureau of Labor Statistics, that addresses characteristics for minimum wage workers in 2012.  If you don’t have the time to click it and run through the statistics, I will provide a brief summary for you:

·         *Most minimum wage workers are young, part-time workers, and relatively few live below the poverty line

·         *50 percent are between the ages of 16 to 24

·         *60 percent hold a part-time job

·         *Less than 20% percent are from families below the poverty line

·         *Approximately 25 percent are married

·         *Only about 5 percent of the over 75 million hourly wage earners in our nation are paid the current federally mandated minimum wage or less

·        * Education, as always, matters as about 10 percent of those who had less than a high school diploma earned the federal minimum wage or less, compared with about 4 percent of those who had a high school diploma (with no college) and about 2 percent of college graduates

Raising the minimum wage is not a good idea.  Price floors are antithetical to a free market economy and harmful to low-skilled and inexperienced workers.  In addition, I believe an increase in the minimum wage will result in even fewer employment opportunities for the most marginalized demographic in our society— African American males (click here for some current statistics).  These positions were never intended to support families.  Rather, they served as an opportunity to acquire experience, gain skills from job training, and function as a launching pad for a move to something bigger and better.  If our nation is truly interested in addressing income inequality perhaps they should stop looking to treat the symptoms and look to eradicate the cause(s).