The Economic Policy Institute
Has a lot of very interesting information about the minimum wage.
It ascribes a significant part of the problem of high teenage unemployment rates to high state minimum wages (or "maximum folly" according to the editorial). This claim disintegrates, however, under even the most cursory examination. Here's why. Teenage unemployment rose from 13.1% to 17% between 2000 and 2004. According to the Journal's argument, the increases in teen unemployment should have been higher in states with higher minimum wages than in those with low minimum wages. What actually happened was the reverse: Teenage unemployment rose 3.4% in the high minimum wage states, compared to 4.2% in the others.source
Nor do economists view the issue with the monolithic disapproval that the Journal presents. Last fall, 562 economists signed a letter agreeing that "the minimum wage has been an important part of our nation's economy for 65 years." Further, they agreed that "as with a federal increase, modest increases in state minimum wages in the range of $1.00 to $2.00 can significantly improve the lives of low-income workers and their families, without the adverse effects that critics have claimed." The signers included four Nobel Laureates, three of whom have served as presidents of the American Economic Association, the mainstream, economists' professional association.
, refuting an August WSJ editorialHere
is a table showing the characteristics of workers who would benefit from an increase in the minimum wage.
They also have a great FAQ about the minimum wage here.
A few bits of data from that:
The earnings of minimum wage workers are crucial to their families' well-being. Evidence from the 1996-97 minimum wage increase shows that the average minimum wage worker brings home more than half (54%) of his or her family's weekly earnings.
The benefits of the increase disproportionately help those working households at the bottom of the income scale. Although households in the bottom 20% received only 5.1% of national income, 38.1% of the benefits of a minimum wage increase to $7.25 would go to these workers. The majority of the benefits (58.5%) of an increase would go to families with working, prime-aged adults in the bottom 40% of the income distribution.
The federal Earned Income Tax Credit (EITC) combined with the minimum wage helps to reduce poverty, but the EITC is not a replacement for a minimum wage increase. For example, in 1997, a single mother of two children working 40 hours per week year-round at the minimum wage would have earned $9,893 (after Social Security and Medicare taxes) and would have been eligible for the maximum EITC of $3,656, which would have put her family income at $13,549, a mere 5% above the 1997 poverty threshold of $12,931 for a family of three. But because the minimum wage has not kept up with increases in the cost of living since 1997, the same family is now below the poverty line. In 2003, a single mother with two children would have combined earnings and EITC of $14,097, or 5% below the 2003 poverty threshold of $14,824 for a family of three.
And I had to include these last three, since they address the arguments being made here specifically:
A 1998 EPI study failed to find any systematic, significant job loss associated with the 1996-97 minimum wage increase. In fact, following the most recent increase in the minimum wage in 1996-97, the low-wage labor market performed better than it had in decades (e.g., lower unemployment rates, increased average hourly wages, increased family income, decreased poverty rates).
Studies of the 1990-91 federal minimum wage increase, as well as studies by David Card and Alan Krueger of several state minimum wage increases, also found no measurable negative impact on employment.
New economic models that look specifically at low-wage labor markets help explain why there is little evidence of job loss associated with minimum wage increases. These models recognize that employers may be able to absorb some of the costs of a wage increase through higher productivity, lower recruiting and training costs, decreased absenteeism, and increased worker morale.
A recent Fiscal Policy Institute (FPI) study of state minimum wages found no evidence of negative employment effects on small businesses.
The point is that choice is the control. Why on earth do you think doctors make so much money? Because they are in short supply and in order to keep them from leaving, the hospitals must pay more. The reverse is true for most cases of min wage occupations. It's easy to find someone else to take the position, generally due to the minimal training needed to fulfill the requirements. If said employees don't care for their situation, they must find alt employment or upgrade their skill sets.
This is far, far too simplistic. Nurses are in higher demand than doctors - why do they make less money? I think using doctors is a bad example, because the issue of their wages is too complex to be reduced so baldly. Is it because of the high cost and time of their education? No, because people who spend lots of money and time earning PhDs in literature don't often get paid as well for their work. Is it because of the value we place on doctors? Partly. Is it because the AMA is such a powerful lobby? Partly. Plus, you can't really say that doctors make uniformly high salaries. Working in a general hospital in the inner city will not make you half as much as working in a private practice that caters to the upper-middle class. Working in a free clinic will net you less than doing brain surgery at John Hopkins.
As for the second part, it is also too simplistic. Most minimum wage jobs do require some training, though rather than skills being learned in a classroom, the skills are taught by the companies - how to run the fry machine might be an example, so would picking vegetables. These businesses benefit from a more stable work force, from not constantly having new employees that must be trained at a cost to the company.
I wish someone would write a book called "Why liberals hate Walmart"... and the subtitle would be because they don't believe in capitalism...
This is just silly. First, most liberals don't "hate" Walmart. Second, those who do have a problem with companies like Walmart, usually have much better reasoning than "oooh, capitalism is bad!" Walmart has been cited for numerous violations of worker protections, anti-unionism, taking out insurance policies on elderly workers, not paying people for overtime hours (to the point of locking workers in stores, and making them work on restocking after they have punched out), and for encouraging third world factories with horrible conditions and draconian worker safety laws. Now, if you want to say that all of those things are examples of capitalism at work, then yeah, capitalism sucks!
If you want to see a great vision of capitalism which is socially responsible and sustaining, read Adam Smith, not Hayek or Friedman!