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Wednesday, January 10, 2007
John Stossel :: Townhall.com Columnist
Sticking it to low-skilled workers
by John Stossel
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Are Barack Obama's friends -- like Bill Ayers -- legitimate political issues?

In the first hundred hours of the just-started session of Congress, the new leadership promises to raise the minimum wage. The Democrats won't be opposed by many Republicans. President Bush says he'll go along with a higher minimum wage if it's coupled with tax and regulatory breaks for small businesses.

Raising the minimum wage is definitely popular. Voters in six states approved higher minimums last Election Day. State politicians in both parties are practically drooling with eagerness to "help" lower-income workers. After all, how can you call the current minimum, $5.15 an hour, a "living" wage? Who can live on that?

We all want the poor to make more money. So if government can raise wages by decree, why are the popular proposals so stingy? What good is a measly buck or two extra? Let's really do something for the poor. Let's raise the minimum wage to $20 an hour. Even better, $50!

Or maybe we should take a deep breath and think like economists for a change.

The law of supply and demand, which operates whether we like it or not, says that when the price of something goes up, people buy less of it. That's why environmentalists like higher gasoline taxes, and anti-smoking activists back higher cigarette taxes.

The law of supply and demand works in the labor market, too. If government mandates a higher minimum wage, some workers will get a raise. Some. But something else will happen. Employers will hire fewer low-skilled workers. Others will let some current workers go. Some will choose not to expand their businesses. A few will close altogether. If an employer believes a worker creates only about $5.15 worth of value on the job, he won't pay $7, even if the government demands it.

Only 2.5 percent of all hourly workers make $5.15 an hour (or less; some jobs are exempt from the law), says the Department of Labor. "Minimum wage workers tend to be young."

Few of them stay at the minimum wage for long. As they acquire skills, their productivity rises and they command higher wages. According to a study done for the Bureau of Labor Statistics, "minimum wages have virtually no effect on the careers of most workers."

A small percentage of people do get stuck in minimum-wage jobs for a longer time. Since wages tend to rise with productivity, these are people whose productivity does not improve. A higher minimum wage will cost some of them their jobs. How does that help them?

Legal wage minimums kill all kinds of entry-level jobs, particularly those that would teach young people basic work habits and the benefits of effort. That's why there are no kids cleaning your windows at gas stations or working as ushers at movie theaters. Those jobs are extinct now because they are worth less than the legislated minimum. Who is helped by that?

Let's face it. The higher minimum wage is a feel-good law. A slight increase will pass because politicians and poverty activists will be able to say they have "done something" for the poor, while the victims of the policy go unnoticed. Those who can't find jobs because they produce too little are not likely to blame the law or the politicians who tried to "help" them. Then the resulting unemployment will justify expansion of the welfare state.

As George Mason University economist Walter Williams says, "It's tempting to think of higher minimum wages as an anti-poverty weapon, but such an idea doesn't even pass the smell test. After all, if higher minimum wages could cure poverty, we could easily end worldwide poverty simply by telling poor nations to legislate higher minimum wages."

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About The Author
John Stossel is an award-winning news correspondent and author of Myths, Lies, and Downright Stupidity: Get Out the Shovel--Why Everything You Know is Wrong.
 
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Subject: John is spot on AGAIN!
The stupidity of this minimum wage issue is so archaic. What idiot thinks that they can live on minimum wage past his/her high school years or even college while obtaining a degree.

If you're stupid enough to think that you can live off of minimum wage, then you fall into the bottom feeder level of natural selection and our society can only hope that you die off soon enough, including your lineage, so as to not keep infecting the evolving society.

Sticking it to Low Wage Earners
So many people seem to think that "The Evil Capitalists" are going to "screw" the poor working stiff out of a "fair" wage.

You listening, "Rayb"?

These people seem to think that, were it not for our Oh So Wise And Beneficent Government, those Evil Capitalists would pay workers NOTHING. Or, maybe pay them a nickle a day or something. And the poor, weakling, snivelling laborer would just TAKE that nickle a day, and do nothing about it.

"Yassuh, massa, T'ANK you fo' my m'sble nickle, T'ANK you!"

HAH!

My daughter just turned 18. She's been working part-time since she was 16. She started off at $1/hour OVER minimum wage, and she's now starting her THIRD JOB.

"Why are you changing jobs?" I ask.

"Coz they PAY MORE," she sez.

Ahhh. 18 months working, and she's already on her third job.

Now, don't get me wrong -- these are not flashy, high-tech jobs. The first one was at K-mart, arranging shoes. The second at Office Depot, cash register. Now she's off to Best Buy, probably talking customers into buying the unit they really wanted anyway. Nothing that requires 27 years in college and a 500 IQ.

And to top that off -- she lives with her old man (me), has no kids, no responsibilities (except the gas for the car). Raising the minimum wage for people like her is a COMPLETE WASTE OF TIME.

SHE IS THE TYPICAL LOW-END WORKER. She's not the exception (except, and I'll admit I'm biased, she's smarter than most!)

Ok, sure, maybe there's a handful of people trying to feed a family of four on a minimum wage job. First, NOBODY told these folks to HAVE KIDS when they CAN'T AFFORD IT. I mean, it's not like we don't know what causes children to happen.

Second, MOST of these folks will work like my daughter -- change jobs each time a better opportunity comes up, and if you're *really* working (vs. slacking off all day, doing drugs, etc.), better opportunities *do* come up.

But -- opportunity does NOT KNOCK. You have to go HUNT for it.

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