Minimum Wage

I urge the Gentle reader to read http://www.dailycamera.com/guestopinion/ci_14059029

A poster, btm1001, wrote:

“And since the new minimum wage means employers will hire the most skilled applicants first, teens find they are left out in the cold.”

So prior to the new minimum wage, employers hired the least skilled applicants first?

It’s the economy stupid! In ALL recessions, teenager unemployment increases faster than general population.

If anything, the increase in minimum wage helped teenagers more than the general population, as 19.9% of teenagers are in minimum wage jobs, compared to only 1.1% of the general population.

It’s amazing how the story changes when you use actual historical study, statistical analysis, and FACTS as opposed to lies.

http://www.epi.org/analysis_and_opinion/entry/tee…

I responded as follows:

I urge the Gentle Reader to look at the graph in http://www.epi.org/analysis_and_opinion/entry/tee… carefully.

In previous recessions the teen unemployment rate went down about 10%. In this recession it went down about 33%.

But that hardly tells the whole story. Teen UNemployment has been going UP because (in my opinion) of the increases in the minimum wage outside of the recession.

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btm100: So prior to the new minimum wage, employers hired the least skilled applicants first?

No, employers hired the best fit for their needs. That’s usually a spread of skilled and non-skilled workers.

But if you raise the minimum wage, employers will often substitute automation and skilled workers for unskilled workers.

For instance, if you are, say, a home builder and you normally hired ditch diggers at $5/hr and now the minimum wage is $10, it is very likely that you will substitute ten ditch diggers for a $15/hr heavy equipment operator and some heavy equipment.

Or the local hamburger joint will install an automated hamburger griller instead of a teenage hamburger flipper.

Here’s the bottom line:
Raising the minimum wage will screw people out of jobs. SOME people (e.g. some ditch digger who can’t be substituted out) will be better off … but many other unseen and desperate people will be out of a job and not even know why they are out of a job.

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It would be awfully nice if government could wave a wand and magically create wealth.

It can’t. It can only distort the economy by fiat and force.

Sadly, it is always able to point at successes “Hey, that $15/hour heavy equipment operator has a job!” but it does not and cannot point to the want ad for ditch diggers or entry level hamburger flippers that never happened.

Ralph Shnelvar
Chair
Libertarian Party of Boulder County