The Minimum Wage Doesn’t Help, It Hurts

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Last night during his State of the Union address, President Obama called for raising the federal minimum wage to $9/hour:

“We know our economy’s stronger when we reward an honest day’s work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line.

That’s wrong.

Tonight, let’s declare that, in the wealthiest nation on Earth, no one who works full time should have to live in poverty — and raise the federal minimum wage to $9 an hour.”

According to information from the Bureau of Labor Statistics, there aren’t many people who are actually making the minimum wage these days. In 2011 there were 112,564,000 Americans working full-time.. Of that number 111,821,000 of them, or 99.4%, were earning more than the minimum wage.

Of the 45 million Americans earning hourly wages and working full-time, 98.3% were earning more than the minimum wage.

Of the 3.9 million teenage workers (ages 16 – 19) earning an hourly wage, 77.2% were earning more than the minimum wage.

There are very few Americans, even among the youngest and least skilled workers, who earn the minimum wage. So how could anyone argue that raising it would help the economy? It won’t. In fact, it would hurt those it was intended to help. The last time the federal government raised the minimum wage unemployment among young and low-skill workers, those most likely to earn the minimum, went up to record levels. Why? Because we inflated the cost of hiring them.

Looking at the states, those with higher minimum wages have higher levels of unemployment for teenagers. That means a higher bar for entering the job market and gaining the skills and experience necessary to move up the career ladder. The minimum wage isn’t a hand-up, it’s a barrier to getting a job for the young and unskilled.

“The minimum wage law is most properly described as a law saying that employers must discriminate against workers who have low skills,” said Nobel Prize-winning economist Milton Friedman. He was right.

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Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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