Labor unions and “moral” activists once again have convinced a few of the poorest and least educated workers in the Triangle to walk off their jobs and demand publicly that they all be priced out of work and their jobs be taken by machines.
True, that isn’t what they think would happen if the federal minimum wage rose to $15 an hour. Practically, however, if they got what they wanted, that’s what would happen.
Working for the lowest allowable wage is nobody’s ideal. It’s better than not working at all, however — a lot better than misguided activists seem to appreciate.
A quick grounding: Who are the minimum-wage workers? How big do you think that portion of the work force is, and who is in it?
Only about 2.6 percent of the nation’s work force is paid at or below the federal minimum wage, according to Pew Research. Slightly over half are between the ages of 16 to 24, and about one-fourth are between the ages of 16 and 19 — new to the work force, often unproven, and often not educated beyond high school. They are getting startup wages because they are startup workers. Nearly four out of five are white, and half are white women. About two-thirds work part time.
The negative effect of raising the minimum wage is one topic about which there is widespread agreement among economists. Harvard University economist Greg Mankiw found that four out of five economists agreed that “A minimum wage increases unemployment among young and unskilled workers.” Few subjects attract that much agreement among economists.
An increase from $7.25 per hour to $15 per hour, which is what the protesters are demanding, would be an increase of about 107 percent. That’s more than double the current minimum wage.
Such a move would have serious consequences. The last minimum wage increase took place from 2007 to 2009. The increase then was by nearly 41 percent.
By 2012, MSNBC was sounding the alarm: “A teen with a job becomes a rarity in the U.S. economy”:
“Only about 25 percent of 16- to 19-year-olds currently are working, a drop of 10 percentage points from just five years ago, according to the Bureau of Labor Statistics.
“The percentage of teenagers who have jobs, expressed as the ratio of employment to population, hovered between 40 and 50 percent for much of the 1980s and 1990s. The percentage began dropping about a decade ago, but the declines have been especially steep since the beginning of the Great Recession in late 2007.”
MSNBC looked further into the data and saw that there were “fewer positions to be had” by teenagers, especially as “jobs that are available are increasingly going to adults who are desperate enough to take a job that might once have gone to a teenager.”
MSNBC then looked at who suffered the most — “those who may need the money most: Teens from poor families and families in which a parent is out of work.” The article discussed this regrettable effect and how it deprives them of the beneficial “ripple effect” of finding a job.
As Andrew Sum, director of the Center for Labor Market Studies at Northeastern University, explained: “The likelihood of working increases significantly once a teen has already held a job.”
It’s important to see that an increase in the minimum wage would benefit workers whose employers decide they would still be valuable to them at the higher wage. That boost to some of the lowest wage earners comes ultimately at the expense of the other, former lowest wage earners and would-be lowest wage earners.
What’s worse, the ones who get left out are the ones who are the least employable, the least skilled, and perhaps the most in need of not just getting, but also learning how to hold, a job. “In terms of need, it is backwards,” as Economic Policy Institute researcher Algernon Austin told MSNBC.
This harsh reality is what makes it all the more distressing that supposed advocates for the poor promote minimum wage increases. You would expect them to understand the plain economic realities.
Jon Sanders (@jonpsanders) is Director of Regulatory Studies for the John Locke Foundation.