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Willisms

« Wednesday Caption Contest: Part 84 | WILLisms.com | Trivia Tidbit Of The Day: Part 391 -- Entitlements Versus Earmarks. »

Trivia Tidbit Of The Day: Part 390 -- Minimum Wage.

The Worst, Most Popular Idea In Politics-

First up on the plate for early 2007: raising the minimum wage. It will pass easily. It will be a unanimous or nearly unanimous chorus of ayes among Democrats, with "liberal" support from the other side of the aisle, as well.

Raising the minimum wage is, hands down, the most popular and worst idea in politics today. While raising the minimum wage is rotundly opposed by economists and wonks and such, Americans from all political and ideological persuasions support raising it-- and raising it by a lot, fast. This is not a new trend. Support is about where it's always been in the modern era, through good times and bad. So many people support raising the minimum wage because, heck, it's better than welfare. With minimum wage, at least we aren't giving someone something for nothing. And who wants to be the one to tell a hardworking man he's not getting a raise this year?

Well, that's all well and good, but it's all misguided. Raising the minimum wage, especially as rapidly as Democrats want to do, will not ameliorate poverty. It won't reward throngs of patrician family men for working hard. It will mostly just eliminate entry-level jobs for teenagers, 20-somethings, and part-time second income earners.

Michael Novak explains:

The total number of people on the federal minimum wage of $5.15 per hour is many fewer than most people imagine: as of 2005, under 1.9 million workers. Sixty percent work only part-time, and a majority (53 percent) are under the age of 25--most of them students or weekend workers. Within this disproportionately large pool of youth "minimum wagers," two-thirds come from families with at least one other family member earning income. Four-fifths belong to families above the poverty line. In fact, the average income of the family of a young individual earning minimum wage is just over $64,000.

More:

Only 12.7 percent of the benefits from a federal minimum-wage increase would go to poor families, while 63 percent would go to families earning more than twice the poverty line and 42 percent to those three times above the poverty line. The reason: the majority of minimum wagers are youths, most of whom come from well-off families.Meanwhile, a hike in the minimum wage will hurt low-skilled workers most because those jobs will be increasingly difficult to find. In 2003, the median hours worked by the highest earner of a poor household was 1,720 -- significantly less than full time: 2,000 hours per year.
"only 3.7 percent of the benefits from a $7.25 an hour federal minimum wage would go to poor African-American families. Only 3.8 percent would go to poor single-mother households." Despite the fractional benefit received by these demographic groups from increases in the minimum wage, history has shown that under such regulations African-Americans have faced severe detrimental effects: unemployment.

Yet more:

Over the years, one of the most vulnerable sectors of the American labor force--black teenage males--has suffered dramatically from raises in the minimum wage. In 1954, before minimum-wage laws were expanded, joblessness for black youths was nearly even with that of whites, at 14 percent. Over the next few decades, the minimum wage rose sharply (from 75 cents to $3.35 per hour). In this same period, the unemployment rate for black teens soared to 40 percent, while the unemployment rate for white youth went largely unaffected. By contrast, Ronald Reagan refused to raise the minimum wage in his two terms as president (1981-1989). Accordingly, unemployment among young black males declined from 38 percent to 32 percent--the lowest rate since 1973. The correlation continued in the early 1990s. Following two hikes in the minimum wage in 1990 and 1991, black teen unemployment shot back up to 42 percent in 1992.

More, out of Waterbury, Connecticut:

Only 1.5 percent of hourly paid workers in America older than 25 make the federal minimum wage and most of them belong to two-or three-paycheck families with an average income of $43,000, according to the U.S. Census Bureau.

Moreover, blue states already have higher minimum wage levels to go along with their higher taxes, slower economic growth, slower job growth, and higher rates of population migration to other (red) states. Notice anything familiar about this map?:

minimumwagemap.gif

Raising the minimum wage is terrible public policy. Other than repaying an electoral debt to the unions for their unprecedented Get-Out-The-Vote efforts in 2006, the minimum wage won't even accomplish any of the bleeding heart stuff the Democrats suggest it will.

Oh well. At least once passed, it will eliminate a major "plus issue" for Democrats (and a "negative issue" for the GOP) in elections to come. And maybe, just maybe, there will be a sprinkle or two of tax relief thrown in as a compromise.

-------------------------------------

Previous Trivia Tidbit: Republicans & Fewer Federal Employees.

Posted by Will Franklin · 20 December 2006 06:49 PM

Comments

It's a way for people to feel like they're giving charity without having to (knowingly) make any personal sacrifices.

And Ben Stein, for some reason I can't comprehend, is one economist who supports raising the minimum wage.

I agree. This, like the death tax, comes from the Democratic desire to punish anyone who works for a living.

Posted by: JohnJ at December 20, 2006 08:16 PM

Oh, and Democrats can't compromise. Republicans already offered a permanent, forty-percent increase in the minimum wage in exchange for a partial, temporary repeal of the death tax.

Democrats killed it.

Posted by: JohnJ at December 20, 2006 08:18 PM