RSS 2.0 FeedThe Big Lie About The Minimum Wage
by Doug MataconisGeorge Will writes in The Washington Post about the new move by Democrats to raise the minimum wage, and injects a much-needed dose of reality into the debate:
Most of the working poor earn more than the minimum wage, and most of the 0.6 percent (479,000 in 2005) of America’s wage workers earning the minimum wage are not poor. Only one in five workers earning the federal minimum lives in families with earnings below the poverty line. Sixty percent work part time, and their average household income is well over $40,000. (The average and median household incomes are $63,344 and $46,326, respectively.)
Forty percent of American workers are salaried. Of the 75.6 million paid by the hour, 1.9 million earn the federal minimum or less, and of these, more than half are under 25 and more than a quarter are between ages 16 and 19. Many are students or other part-time workers. Sixty percent of those earning the federal minimum or less work in restaurants and bars and earn tips — often untaxed, perhaps — in addition to wages. Two-thirds of those earning the federal minimum today will, a year from now, have been promoted and be earning 10 percent more. Raising the minimum wage predictably makes work more attractive relative to school for some teenagers and raises the dropout rate. Two scholars report that in states that allow people to leave school before 18, a 10 percent increase in the state minimum wage caused teenage school enrollment to drop 2 percent.
In other words, there is no permanent underclass living solely on the minimum wage. People may start at the low end of the wage scale, but they move up quickly and new employees take their place at the bottom. It’s the way the world works.
More importantly, though, by raising the minimum wage, or even having one to begin with, the state creates a series of incentives that may lead to results far different from what they intend. Will is right, though, there should be a minimum wage, it should be $ 0.00.
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