Sunday, March 16, 2008

Higher Minimum Wage = Higher Teen Un-employment...

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The Democratic Party has been quick to list the raise of the minimum wage as one of their triumphs since taking control of Congress in 2006. Many people argued that the minimum wage had to be raised to provide a “Living Wage” for those entering the workforce. But yet they ignored that many of these entering the workforce for the first time are unskilled workers who must be trained by the employer to increase their skills and productivity…


Documentation showed that employees entering the workforce with skills and training already were commanding higher then minimum wages and many unskilled workers were still getting more then minimum wage due to a tight labor market. Businesses were already paying more to attract potentially more productive employees to increase and grow their businesses. This is a proven aspect of the free market system and shows that a employee who increases their skills will command better wages. By setting a high minimum wage it makes it harder for a business to hire, train, and support a unskilled worker such as a teen aged person entering the workforce for the first time…

IBD (Investors Business Daily) has an article with data showing the effects of a mandated increase in minimum wage actually increases the unemployment rate of the unskilled worker. Democratic Senator Ted Kennedy represents the state of Massachusetts were the state minimum wage is at $8 an hour and highest in the nation.

“There, government officials and labor experts alike have been scratching their heads over the precipitous 33% drop in teen employment over the past eight years. "The collapse of the teen labor market has affected all demographic and socioeconomic groups," noted labor economists Andrew Sum and Don Gillis in a Boston Globe op-ed last week.”

“As a basic point of economics, it's a given that anytime you raise the cost of anything, you will use less of it. As such, the minimum wage hike that took effect in Massachusetts this year has been a job-killer for thousands of untrained youths, many of them minorities.”

By simply mandating that a business must pay a higher wage for a unskilled entry employee it takes away that business options and ability to invest in bringing along a unskilled person.

“It's the same everywhere, nationwide or by state: Hiking the minimum wage sounds generous and decent, but in fact hurts small businesses and workers alike, squeezing profits, destroying jobs and forcing businesses to pare back their paid benefits.”

“Faced with a mandatory hike in their wage costs, small businesses have a choice: either fire workers, raise prices or do both. Just letting people go often is easiest. Small wonder that teens — often at the bottom of the labor ladder, and with the least to offer in terms of productivity, training and education — are the first fired and the last hired.”

3 comments:

Multifuncional said...
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BUBBA said...

The minimum wage is just a back door legislation for a welfare program. The only people working for that wage are folks with no skills and no motivation to improve themselves. I can't find people who have a work ethic where I am and I pay well above the minimum. The root issue is not a wage rate it is a work ethic. Fix it to where people once again understand that they will have to work for what they get and we will see a drastic improvement in productivity and the job market.

All the democrats did was buy votes from those who don't want to work or will not work, and eliminate a bunch of entry level jobs that would have begun to teach teenagers a work ethic. What is next? Wait for the call to raise welfare payments because the minimum wage is higher.

Bubba

RightsideVA said...

They bought votes by continuing their programs of making the weak more dependent on the government. A Democrat congressman who I cant recall his name is now calling for a 50 cent per gallon increase in fuel prices to curb consumption and use that money for alternative fuels. He (They) have not said it yet but I am sure that a "relief" package will be provided for those who can't afford the increase...
More Vote buying?