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Minimum wage debate

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The political football that is minimum wage was the topic of the Heritage Foundation Factsheet #136, Facts about the Minimum Wage. Released on January 30, 2014 the factsheet has interesting information from peer-reviewed journals, The U.S. Census Department, The Bureau of labor statistics, as well as Heritage foundation research.

The first well-placed point is that raising the minimum wage does not relieve poverty; minimum wage jobs are learning jobs that help people gain better basic employment skills and become more productive. The factsheet cites 2001 Monthly Labor Review article, “Do Some Workers Have Minimum Wage Careers,” written by William Carrington and Bruce Fallick, the article states “Over half of all Americans started their careers making within $1 of the minimum wage. Few stayed there long.”

Primarily members of society that are not the heads of a household earn the minimum wage, with over 50% of those who earn minimum wage between the ages of 16 and 24. Despite those, advocating for a “Living wage,” the average household income for people making minimum wage is well above the poverty line at $53,000 a year. Just 4% are single parents.

Increasing the minimum wage to $10.10 will add to the burden create by the Obamacare employer mandate that will become effective beginning 2015. The combined Obamacare penalties and minimum wage of $10.10 an hour would increase the cost for and the employer to hire a full-time employee to $12.71 a/hour. If you think your extra value meal is expensive now, just wait.

Peter Coy in his article, Making the Economic Case for More Than the Minimum Wage ..., on states that the effect on the overall employment rolls, if any is small. He writes, “Higher wages reduce turnover by increasing job satisfaction, so at any given moment there are fewer unfilled openings.” Is Peter Coy saying that raising the minimum wage makes people content with mediocrity?

The article by Peter Coy is polluted with pictures of people holding signs bemoaning the state of their economic lives earning minimum wage. Most are obviously beginning in the Jobs market and will, according to research, not say at minimum wage. The images are, no doubt, set to gain an emotional response from the reader hoping that they will forget to engage their brain.

After discussing and postulating, this theory, or that or discussing one piece of research or another, Peter Coy ends were most conservatives have been, and where we began with the Heritage foundation factsheet. Minimum wage should be a starting point, and for most it is. He writes:

“You see the problem. Social justice demands a minimum wage of more than $20 an hour. Economics won’t allow for one much higher than $10. The way out of the dilemma is to acknowledge that the minimum wage is being called on to do more than it reasonably can. A minimum-wage job shouldn’t be any family’s primary means of support…” As we found out from the Heritage Foundation report that a minimum wage is usually not the sole means of support; we have come full circle, and this should end the debate, but it won’t.

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Video: John Stossel - Real World Effects Of Minimum Wage



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