Newspaper article The Christian Science Monitor

The Minimum-Wage Scam

Newspaper article The Christian Science Monitor

The Minimum-Wage Scam

Article excerpt

Presidential politics is in full bloom, and so too is the Democratic push for an increase in the minimum wage. Sen. Edward Kennedy (D) of Massachusetts is leading the effort to embarrass presumed Republican presidential nominee Bob Dole, who has so far blocked a Senate vote on the measure. The House leadership is also under pressure, and Republican defections make passage likely if the increase comes to a vote.

But leading Republicans should be embarrassed not at opposing a minimum-wage hike, but at failing to articulate why. Simply put, the minimum wage is awful policy, punishing firms for employing low-wage workers and locking the least-educated and skilled people out of the workplace.

Unless businesses operate as charities, and most do not, they will hire fewer workers at higher wages. Even advocates of the minimum wage implicitly understand this, else they would propose a minimum of $51.50 an hour rather than $5.15. After all, if Congress can overturn economic reality by fiat, then why not make everyone rich?

People receive low wages for a reason - they typically lack the training to earn more. Unfortunately, government wage-setting does not give them the necessary skills. Rather, it tells employers not to hire anyone who can't produce the official minimum. As a result, there are fewer jobs, especially for society's most disadvantaged, such as urban teens.

Many studies, including those by the Congressional Budget Office, General Accounting Office, and President Carter's Minimum Wage Commission, have concluded that raising the minimum wage costs jobs. Despite this evidence, minimum-wage advocates have argued that "fairness" requires a hike.

But now there is a contrary study, an analysis of a 1992 New Jersey minimum-wage increase. Senator Kennedy, Labor Secretary Robert Reich, and others have loudly touted this report, all the while continuing to ignore the larger body of work amassed over the years. …

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