Thanks to an ill considered bit of nanny state economic meddling last year, the federal minimum wage is set to increase again at the end of July from $6.55 to $7.25.  What better time could they have picked to increase the number of unemployed?  Secretary of Ruining the Economy, Hilda L. Solis, spouted the following nonsense:

“This administration is committed to improving the lives of working families across the nation, and the increase in the minimum wage is another important step in the right direction,” said Secretary of Labor Hilda L. Solis. “This well-deserved increase will help workers better provide for their families in the face of today’s economic challenges. I am especially pleased that the change will benefit working women, who make up two-thirds of minimum wage earners.”

It will benefit some working women, but it will do so at the expense of those who lose their job as a consequence of this legislation.

Some facts from the Employment Policy Institute:

1. For every 10 percent increase in the minimum wage, teenage employment at small businesses is estimated to decrease by 4.6 to 9.0 percent.¹

   According to the U.S. Bureau of Labor Statistics, teen unemployment is at 24 percent, its highest rate in 17 years.²

2. For every 10 percent increase in the minimum wage, estimates show employment may fall as much as 8.5 percent for young black and Hispanic males age 16-19.3

   African American teen unemployment is currently at 38 percent, which is four times the national unemployment rate and 27 percent higher than last year.²

3. According to U.S. Census data, only 16.5 percent of minimum wage recipients are raising a family on the minimum wage. 83.5 percent are teenagers living with working parents, adults living alone, or dual-earner married couples.²

You can read more on the folly of minimum wages in the Compendium Files.

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This is unbelievable. Rep. Peter King, Chairman of the House Homeland Security Committee, has an op-ed titled “Now is the time to raise the minimum wage” that is little more than a copy/paste of socialist, left-wing talking points on the minimum wage. That he could be this ignorant is rather shocking.

It has been far too long since Congress last increased the minimum wage. In September 1997, minimum wage was increased from $4.75 to $5.15- where it still stands. Since then, Americans have seen a steady increase in living expenses. The price of food has increased by 21 percent, rent by 28 percent, childcare and preschool by 48 percent and gasoline by 81 percent.

It is getting increasingly difficult for a person making $5.15 an hour, even if they are working a full forty hours a week, to live off of this wage. That is a total of only $10,700 per annum! For a single mother or father with two children, this wage leaves them well below the federal poverty line. Hard working Americans who are just getting by on minimum wage are too often faced with the decision of paying their rent, or paying for groceries; paying their heating bill, or paying for medication. That is entirely unacceptable.

Once again, we see rank economic ignorance and disinformation on display at the highest levels of government. Rep. King wants you to believe that minimum wage workers are, by and large, family bread winners. Hard workers struggling to provide for their family and never catching a break. This is false. Only 19% of minimum wage earners fall below the poverty line. The average household income for minimum wage earners is $40,000. This is due to the fact that, of the 1.9 million minimum-wage earners, more than half are under the age of 24. And of minimum wage earners, 2 out of 3 will be earning 10% more within the year.

What King won’t tell you, but any economist can, is that minimum wage laws hurt, rather than help, the poor. Minimum wage laws increase poverty. They deny low skilled workers the opportunity to gain experience by increasing the costs to businesses that hire them.

Compendium File: Minimum wage laws

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