The idea of hiking the federal minimum wage from $7.25 an hour to $10.10, made popular by progressives, is so appealing to the masses because in theory, it sounds great. In reality, it hurts the individual it proclaims to help: the young, unskilled worker.
First off, the Department of Labor reports that only 2.8 percent of the U.S. workforce earns at or below the minimum wage. Accordingly, about half of those individuals are between the ages 16 and 24, because the majority of minimum wage jobs do not require an educated skill.
These jobs are designed for teenagers who need on-the-job training, college students who need to pay the rent and some college graduates who are looking to start at the bottom and move up in the workforce.
Cleverly, progressive politicians have helped make the minimum wage a favored mainstream law, with low-skill workers often buying into their nonsense and rallying around the demand that the federal government raise it by 39 percent over the next two years. These individuals don’t realize they would be the most damaged by a hike in the minimum wage because as the cost of unskilled labor is forced to rise, the less employers will buy. In other words, unskilled workers are less attractive when their government mandated price-tag increases. The Congressional Budget Office reports that a minimum wage increase to $10.10 would be at the expense of 500,000 jobs.
A higher minimum wage costs the low-skilled individual his or her job because it encourages employers to hire skilled, trained workers. These low-skilled individuals are mainly young people from working and middle class households. It is not just a higher minimum wage that hurts the young unskilled worker, it is the minimum wage law altogether.
Note the minimum wage law does not create jobs, as progressives would have you believe. It simply bans jobs that do not pay enough, but only according to the federal government. All of this is done under the disguised lie of “humanitarianism.”
Humanitarian is the last label the minimum wage law should receive because, like other government “fixes,” it encourages mistreatment of the worker. As noted by economist Russ Roberts, before the law, employers had to respect their workers in fear they could find other work that paid more. Now, with the law, employers do not need to because there are no alternatives for the worker.
Minimum wage law states that the federal government has the control to dictate what employers in a free market pay their employees. Without the minimum wage law, employers would have to actually compete for workers, rather than paying every worker, no matter how good or bad, the same.
A workforce with no federally mandated obstructions threaten the well-connected and gives command to the employer and employees. A business asking that low-skilled workers work for $5 an hour will be outbid by another business nearby paying its low-skilled workers $8 an hour, thus compelling its competitor to raise its wages. All of this can be done without the burden, or what progressives call “help,” of the federal government.
Though it seems the increased minimum wage gives the individual a stronghold on his or her wage, it actually gives full authority to the federal government, while keeping the individual’s wage static.
In order to aid the individual, the federal cap on workers’ pay should be lifted, no matter how many progressives whine.