Saturday, July 14, 2012

Do minimum wage laws work? part II

Less than 1% of the American workforce earns the federal minimum wage.
Raising the minimum wage is not a huge problem for the American public. 
Minimum wage laws sound good.  The worker gets paid more, and more people can support a family.  It's a win-win situation.  In fact, both Romney and Obama support increasing the minimum wage.  Yet, wait!  Minimum wage increases don't work!

What?  Well, if minimum wage laws worked, then why is it that most new hires make more than minimum wage?  It's true, and statistics prove it.  The reason is because minimum wage laws make it so people with no skills, people who have to be trained, don't get hired.

Remember the man who'd check your tickets and guide you to your seat at movie theaters?  Remember the man who'd fill your gas tank and wash your windows when your car was low on gas?  Those jobs are now illegal.

Those are unskilled jobs, and it's illegal to hire them at fair market value. Employers have eliminated those jobs because they only hire workers who have experience.  Gone are the days someone is hired off the street and trained for a skilled position.  Gone are the days a retired person is hired to do a fluff job that he enjoys, because he can't be hired for minimum wage.  

Today when most employers have jobs open they hire people who are already trained, who already have basic skills.  He does this because most employers don't want to hire someone at the minimum wage (which may be $14 an hour after taxes and Obamacare) and then have to spend the time training them, all the time taking the risk that they will even want to stay working for you.

So only those with training are hired.  The people who suffer as a result of minimum wage laws are those workers who have no skills, which mainly happen to be teenagers who, according to, have an unemployment rate of 23.8 percent, while the national jobless rate is 8.3 percent.  

So the next time a politician, your buddy, suggests the minimum wage laws are good, or should be increased, you can fill them with this bit of wisdom.  

To view Do minimum wage laws work part I, click here.  

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