Minimum-wage mess
Raise in pay puts pinch on teens and others nationwide
Augusta Chronicle Editorial Staff
Sunday, June 29, 2008

The act that required the federal minimum wage to be raised to $7.25 an hour by 2010 eased into law as a rider to a congressional omnibus spending bill in 2007.

That act was a bad idea, and it flies in the face of the mountain of economic research that shows that a higher minimum wage does little to alleviate poverty.

If employers have to pay more to their workers, they're forced to cut workers because payrolls don't magically grow to accommodate more employees. And don't buy into the notion that the minimum wage has to be a livable wage, because it's not meant to be. It's pay for entry-level jobs mostly held by younger people who are not their households' primary wage-earners.

Now the wrongheadedness of a higher minimum wage is coming home to roost -- and more people are more likely to be home as well, instead of at work.

Researchers at Northeastern University in Boston have deemed this year's summer job market as "the worst in post-World War II history." Only about one in three teens ages 16 to 19 will have a job this summer. That statistic gets even lower for low-income and minority teens.

In Georgia, the minimum wage has risen 13 percent, and this summer it's expected to go up another 11 percent -- and that's bad news for teens who want summer jobs, according to the Employment Policies Institute.

"The classic summer jobs -- cashier, restaurant waiter and grocery clerk -- can help an employer who has increased business or a need to cover for full-time employees taking vacations or sick leave," EPI senior economic analyst Kristen Lopez Eastlick explained. "But when government mandates add to labor costs by artificially boosting wages, employers are more likely to hold off on hiring people to fill such flexible slots."

A higher minimum wage hurts high-school dropouts and young minorities more than it helps. David Neumark, an economics professor at the University of California at Irvine, has said that for every 10 percent rise in the minimum wage, there is an 8.5 percent drop in job availability for dropouts and young blacks.

Look at research done at the University of Georgia. Or Cornell University. Or the University of Connecticut. All show that job loss is four times as likely for dropouts than other sectors of the general public if the minimum wage is increased.

As for the assertion that a minimum-wage raise is designed to help low-income parents, Eastlick points out the U.S. Census Bureau statistic that just 14 percent of recipients of the newest hike are the only breadwinners for their kids.

The pitfalls of raising the minimum wage unfortunately fell on deaf ears the last go-around, but hopefully politicians will listen in the future and carefully weigh the consequences of such an act.

From the Sunday, June 29, 2008 edition of the Augusta Chronicle
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