The minimum wage hurts ex-cons, teens, and African-Americans

That’s the assessment Bill Wirtz offers of the government-mandated minimum wage in a column for the Foundation for Economic Education.

For labor unions and politicians, increasing the minimum wage is an easy sell: Once instituted, the hourly minimum rate can be gradually elevated at no expense to the government, eliminating the necessity to answer pesky questions about “who is going to pay for that?” …

… However, the reality is that the very people who need a boost in the labor market are denied it as a direct result of these laws. The minimum wage asks employers to pay workers above the value of their hourly work, either forcing them to be charitable (unlikely) or leading to the rational conclusion of opting to automate a job or forgo hiring an extra person in the first place. …

… A 2006 University of Georgia study found that every 10 percent increase in the minimum wage was associated with a 4.6 to 9 percent decline in teenage employment. The researchers added: “Moreover, a 10 percent increase in the minimum wage reduces average retail hours worked by 5 percent, and, among teens who remain employed in the retail sector, reduces average hours worked by 2 to 3 percent.” …

… Prior to the Fair Labors Standards Act (FLSA), which instituted the first federal minimum wage of 25 cents per hour, the black-white unemployment gap did not exceed 1 percent. Today, the black unemployment rate is twice that of whites. Raising it, as is suggested by multiple Democratic presidential candidates, would only accelerate this phenomenon. …

… A 1976 review published in the Monthly Labor Review projected that both federal and state minimum wages would affect individuals who were “in particularly poor bargaining positions (in prison and immediately after release).”

Mitch Kokai / Senior Political Analyst

Mitch Kokai is senior political analyst for the John Locke Foundation. He joined JLF in December 2005 as director of communications. That followed more than four years as chie...

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