"It profits me but little that a vigilant authority always protects the tranquillity of my pleasures and constantly averts all dangers from my path, without my care or concern, if this same authority is the absolute master of my liberty and my life."

--Alexis de Tocqueville, Democracy in America

Wednesday, February 13, 2013

President Obama's Minimum Wage Proposal = Fewer Jobs for Poor Black Kids

Sorry, if that headline is too blunt.   But this is one of my pet peeves.   The Democrats always talk about "science" whenever they want to tax us for using carbon or spend our money on green energy boondoggles.   But the science of economics is something they find it easy to ignore.

This is basic stuff.   If you raise the price of something where there is a constant supply, you'll get lower demand for it.   If you raise the price of hiring an unskilled worker by raising the minimum wage, you'll get fewer employers who will hire them.   Instead, in a global market, they will choose to do their manufacturing and assembly tasks overseas, where they don't have to pay the minimum wage.

So, when President Obama says last night in his State of the Union address that he wants to raise the minimum wage to $9.00, that may sound nice, but the economic reality is that it will mean fewer people employed in minimum wage jobs.

Who are those people who will be out of work?   Primarily the young, the poor, the urban, the minority.

But don't take my word for it.   Here's the Bureau of Labor Statistics:
  • Minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly-paid workers, they made up about half of those paid the Federal minimum wage or less. Among employed teenagers paid by the hour, about 23 percent earned the minimum wage or less, compared with about 3 percent of workers age 25 and over.
  • Now, what effect does the current minimum wage have on employment of young people?  The last time it was increased was in 2007, when a series of step increases brought from the prior $5.15 an hour it to its current level of $7.25 an hour.   (That was an increase of nearly 40%; Obama's proposal would be a nearly 25% increase on top of that!)   Here's what happened to employment of African-Americans under age 25:

    Is there an economist anywhere in America or the world who will stake their professional reputation on the proposition that raising the minimum wage from $5.15 five-and-a-half years ago to $9.00 (if Obama's proposal goes through) would not have a crushing effect on employment of unskilled black kids?   I doubt it.   It's only the ideologues of the Left who somehow think they can rewrite the laws of economics.   They'll certainly feel good about themselves, as they sit on the beach in Hawaii, or as they drop their own children off at Sidwell Friends in DC.   But the kids of Detroit, Chicago, East St. Louis, the barrios of LA and Miami, the Bronx... they'll be back on the street.

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