Raising Minimum Wage: Who Does it Really Help?
America Takes A Pay Cut
Red Planet Cartoons
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Who does the hike in the minimum wage help? Hint: it isn’t the “poor”.
Red Planet Cartoons takes a look at the increase in minimum wage in their latest.
From The Wall Street Journal: Bad Law, Worse Timing.
Most are not family heads making the minimum wage full-time all year. They are young single adults, teenagers living at home or spouses providing a second income. The average family income of a minimum-wage earner is $44,636, and 42% of these workers live with a parent or other relative. Only 15% of employees making the minimum wage are single earners with dependents. “A minimum wage increase today is a middle-class family entitlement,†says EPI Executive Director Rick Berman, “because that’s who’s working at the minimum wage in second and third jobs.â€
Repeated studies have shown that minimum-wage increases are more likely to slow job creation than reduce poverty. A large share of the costs of these mandates are borne by the same low-income families the wage hike is supposed to help. Employers inevitably pass wage increases onto consumers as higher prices for goods and services, which erodes the spending power of all consumers but especially the poor. Employers also respond by hiring fewer unskilled workers, a disproportionate number of whom are teenagers and minorities.
Why would politicians vote for a minimum wage increase when it’s been demonstrated, time-and-again that it hurts the very people it’s supposed to help?
It’s the ultimate liberal politician’s wet dream.
It allows the liberal to proclaim that (s)he’s helping the poor. It also fulfills the political need of “doing something”–whether that “something” is beneficial or not. Finally, it allows the liberal to feel good about themselves for being such a fine, outstanding person.
The facts be damned.
As a personal note: eons ago, while managing a fast food restaurant, the minimum wage was increased. That raised labor costs as well. Labor costs at our store were fixed as a percentage of sales the store did. The usual amount of money we had to work with for labor costs at that time, was roughly (if memory serves), $280 per week.
Though the minimum wage went up, the budget for labor costs did not. If the labor costs budget increased, then our prices had to increase, also. The upshot: we had to let one of our eight workers go and cut the hours of two others.
That is the real-life consequences of a rise in the minimum wage.
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Raising the minimum wage: who does it really help?
Ask the politicians.
by Mondoreb
Source: America Takes a Pay Cut
You may have noticed that Unions are always in favor of minimum wage increases. Their support always seemed counterintuitive to me. Unions are all about restriction. Nobody gets anyhting unless the union arranges it. Many years ago I was involved in the negotiation of a union contract in New Jersey. The negotiations were entirely illegal. We hadn’t opened the factory yet and didn’t have a single employe. Didn’t matter at all. The contract was negotiated completely in advance. Arrangements were made for us to “hire” the union organizers at the appropriate time. The union suggested we lower our initial hiring wages so that they could “win” a raise for employees later. The “owners” of the union considered workers to be their inventory.
Each wage level in the contract was “Minimum wage plus X”. Assuming this is the ordinary way of quantifying remuneration in Union contracts (I have no reason to think it isn’t given my experience), every time there is a minimum wage increase all hourly union workers also get a raise. Union support of minimum wage increases makes a little more sense now.
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Michael Markowitz ,
Excellent illustration.
Thanks for taking the time to stop by, read and comment.
Oh yeah, you’ve been added to the blogroll.
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