People pretend that calling a raise in the minimum wage a “job killer” is disingenuous. But it isn’t just raising it that should count. Our current minimum wage is already killing jobs. It is especially hitting the most marginal.
Let’s review a few facts about minimum wage.
First, it enables irrational discrimination. Here you can throw in agism, sexism, racism or anything else. Obviously, an employer who despises African Americans is not going to want to hire them. But what if it costs him to be racist? In our history, racist landlords evicted white families in the cities because they found they could divide up their dwellings and make a lot more money renting to poorer blacks. Those became the ghettos. Whites who fled to the suburbs invented housing codes that prohibited dividing up houses for multiple families. So poorer minorities stayed stuck in the cities. Likewise, minorities can and have outbid competing White laborers for jobs. They did this by being willing to work for less. Was this fair? No! But it got African Americans in the labor market, and those beginning wages were not the wages that they were stuck with for the rest of their lives as they learned skills and move on to better situations.
Second, it hurts the most marginal workers. If I have ten workers and the minimum wage is raised so I can’t keep them all, I will probably fire the ones who have the least skills or education. So the poor single mother who barely scrapes by is more likely to lose her job altogether, while the high school student whose parents provide him with room and board will get the advantage of that extra money to spend on video games.
So this latest jobs report coming amid the push for a higher minimum wage law is rather ironic, in a bitter sort of way.
From CNS News:
The teen unemployment rate went up in January to 20.7% — from 20.2% in December– and is now more than three times the national unemployment rate of 6.6%, according to the latest data from the Bureau of Labor Statistics (BLS).
The BLS numbers show there were 1,140,000 people ages 16-19 unemployed in December. For January, that number was 1,147,000 – an increase of 0.6%.
The teen unemployment rate (seasonally adjusted) has been in the 20s range (high and low) since October 2008. It hit a high of 27.3% in October 2010.
So even though the unemployment rate is kind of coming down, it isn’t coming down for everyone. It is reasonable to assume that teen employment is disproportionately affected by the minimum wage laws. So why are we pretending that raising it will help people? We know a higher minimum wage law will be a job killer because we know the current minimum wage law is a job killer.
Remember, it is not just teens, African Americans and women are having problems as well.