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Raising the Federal Minimum Wage Would Be Detrimental
The federal minimum wage has been a topic of growing conversation among liberals, including President Barack Obama and Senator Bernie Sanders, whose support for increasing the federal minimum wage can only be seen as economically naive. As an intern who will soon be looking for a job, I must think of the consequences for my fellow teenagers should the federal minimum wage be dramatically increased like Obama and other liberal left politicians are proposing.
In 2007, the Fair Minimum Wage Act increased the federal minimum wage to $5.85. Two years later, the wage was increased $7.25. These recent increases, particularly because they were not enacted by state legislators, have failed to mitigate poverty, as intended, and they have created a more regressive state with higher unemployment among the less-skilled members of the lower class.
Last April, CEO Dan Prince of Gravity Payments, a 120-employee, Seattle-based credit-card processing company, cut his own seven-digit salary and announced a plan to implement a $70,000 annual minimum salary for his employees. He was heralded as a pioneer in the rectification of wage inequality, but the decision is now causing himself to endure significant financial hardship.
In early 2013, the American Enterprise Institute published a report detailing the adverse effects on teenagers of the Fair Minimum Wage Act, which was signed into law. The jobless rate for 16-19 year olds, the authors found, increased from about 16 percent in 2007 to more than 26 percent in 2009. The overall US jobless rate rose simultaneously, from about 5 to 10 percent, so they isolated the effect of the minimum wage increases on teenagers by plotting the difference between the teenage jobless rate and the overall jobless rate.
When the Congressional Budget Office published a report titled “The Effects of a Minimum-Wage Increase on Employment and Family Income,” the non-partisan agency argued that the increase would sabotage many jobs and families. By increasing the minimum wage in jobs where employees are paid for the production of goods and services, the price of those goods will increase. Thus, many families who thought they would benefit from the wage increase are now forced to pay for the higher prices of these consumer goods. The CBO also noted that 21 states had a minimum wage higher than the Federal Minimum Wage which leads many people to believe that the Minimum Wage should be enforced by states rather than the feds.
I decided to ask one of my friends about their minimum-wage summer job. Daniel Ramos, who is a lifeguard at a pool club, surprised me by explaining that since he has no job experience, he would rather earn very little than have no job at all. Ramos’s example can be applied to many other jobs. What he said goes against what many unions want: to increase the minimum wage so they can keep out inexperienced workers and see their own wages rise.
With so much evidence suggesting that raising the federal minimum wage will hurt people like me, and so many economists opposing an increase in the federal minimum wage, I hope those advocating for it will reconsider. The previous increases have already given more power to the unions and future increases will allow them to keep out more unskilled workers. Once raised, it will be very hard to reduce
Are you leaning toward the President’s perspective on minimum wage, or do you believe that the minimum wage should stay the same or be decreased? Do you think this should be a federal issue or are you like many other conservatives who believe this should be a state issue?
Published in Economics
I disagree with Brian about the states setting the minimum wage. It should be set at the local level.
I have no clue what you are talking about in how GMO labeling relates to federal minimum wages.
OK, this time I’ll say it in CAPITAL LETTERS. Maybe it’ll help you understand the connection. BOTH OF THEM HAVE TO DO WITH THE ISSUE OF STATE OR LOCAL CONTROL VS FEDERAL CONTROL. There. Does that help?
Nope. Can we discuss the price of tea in China as well? It seems about as related to me.
Or maybe you can make your case on how these items are connected as opposed to just finding the CAPS key.
BTW – using bold face will most likely not make your case any better on your next post.
How does the price of tea in China relate to the issue of state vs federal control? Are some states enacting price controls on it?