Minimum wage hike a threat to economy
To the editor:
Question: How much do our state legislators know about economics? For the majority of them, the answer appears to be “not much.”
Consider the fact that state representatives recently passed a measure that would raise the minimum wage to $9.50 an hour by 2015. They think that this “living wage” will benefit both the worker and the overall state economy. But, economically speaking, they are wrong.
What happens when wages are artificially increased and there is no corresponding increase in the worker’s productivity? There will be more workers desiring to work, but there will be less demand for their work. The result is an increase in unemployment.
Unfortunately, the real minimum wage is zero, regardless of the laws, and that is the wage that many workers receive when the government tries to “help” them by increasing the minimum wage. They either lose their jobs or fail to find jobs when they enter the labor force.
Most unemployed workers are capable of producing goods and services, even if not to the same extent as more skilled or more experienced workers. They are made idle by wage rates artificially set above the level of their productivity.
Those who are idled in their youth are delayed in acquiring the job skills and experience which could make them more productive – and therefore higher earners – later on. So they not only lose the low pay that they could have earned in an entry-level job, they lose the higher pay that they could have moved on to and begun earning after gaining experience in entry-level jobs.
Younger workers are disproportionately represented among people with low rates of pay. Only about two percent of American workers over the age of 24 earn the minimum wage.
An increase in the minimum wage may have a certain emotional appeal, and it may benefit politicians who want to appear to be caring, but its impact on workers, especially younger workers trying to get a start in the work force, is devastating.
Michael A. Thom