Minimum wage creates clash of the opinion pages
As we noted earlier this year, the buying power of the minimum wage peaked in 1968 at $1.60. It is now near its lowest actual worth, adjusted for inflation, in its history, with an estimated two-thirds of those who are paid at this level adults. With rising energy prices, and inflation generally starting to gain ground, it is time to give those workers on the bottom rung of employment a boost in income.... while the Tribune-Review thinks it's foolhardy.
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It shall be interesting to see whether those lawmakers who voted themselves a pay increase so over the top that it shocked the commonwealth from Erie to Chester can vote to deny a pay raise to those laboring at the margins of economic sustainability.
Not only are most minimum-wage earners not "poor," half are under 24 and nearly half of them still live with their parents. Nearly two-thirds are part-time workers. And the average family income of the typical minimum-wage employee in Pennsylvania is $50,000.I don't know the publications that well, but I can guess that they represent rather different slices of the political spectrum . . .
The irony of the Rendell proposal is that, if adopted, it would kill thousands of entry-level jobs so vital to giving young people their first critical work experience.
I'm no expert in this field, nor about to become one with a few Google searches, but that last study doesn't jibe with what I've heard from a bunch of independent sources. To randomly waive other data (say, this), I might offer:
• Historically, analyses of the minimum wage's impact on young workers have never shown the predicted large job-loss effects.Note that parts of this list aren't necessarily inconsistent with the above, but certainly casts the light in a different direction. So, as ever, one must take the "facts" in opinion pieces with a grain of salt.
• The small negative employment effects found in past analyses diminish over time and are no longer statistically significant.
• Minimum wage increases are well targeted in the sense that 63% of the gains from a dollar increase in the minimum wage would be expected to accrue to working households in the bottom 40% of the income distribution.
• Of the 8.4 million workers (age 18 to 64) whose wages and incomes would increase with a one-dollar raise in the minimum wage, 2.7 million (32%) are the parents of 4.7 million children. Of the 2.7 million parents who earned at or near the current minimum wage in 1999, 63% had family incomes below $25,000.
• Most minimum wage workers are adults (71%), age 20 and up. Women and minority workers are over-represented among the minimum wage workforce. Slightly less than half (48%) of the minimum wage workforce are full-time workers.
Update: here's a related study showing that the cost of insuring a family of 4 is now more than the annual salary of a minimum wage worker...