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Minimum-Wage Hike Will Help Some but Hurt Others

"Regarding your editorial "The Minority Youth Unemployment Act" (Feb. 16): It was pure political theater and pandering for President Obama to throw the minimum wage into his State of the Union address. The topic is just another diversion from the serious business of creating jobs, reducing debt, reforming the tax system and tackling Medicare. The work of economist David Neumark reveals that a 10% increase in the minimum wage will decrease employment of minority teenagers receiving the minimum wage by 6.6%. However, few families, few full-time workers and few minority young adults are impacted.

According to the March 2, 2012 report of the Bureau of Labor Statistics on the characteristics of minimum-wage workers (MWWs) there are only 3.83 million hourly workers (from a total of 73.9 million hourly workers) who are paid at the minimum wage or less. About 43.2% work in food service where tips are excluded in the minimum-wage status determination. The number of MWWs who are full-time workers with families is less than 1.4 million.

Minorities account for 14.61 million hourly workers and 823,000 of the MWWs. It is estimated that fewer than 250,000 of the 823,000 minorities are teens. So if a 24% rise in the minimum wage is instituted, a 16% decrease in minority teen employment will occur and a 9.4% decrease in total minority employment will occur. This will decrease minority teen income by $450 million and all minority income by $860 million. However, the total MWWs who don't lose their jobs will have a total increased income of $9.4 billion."  For more information click the llink below.

Source:  The Wall Street Journal


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