Consequences of a 'living wage'

Proponents of a federally mandated "living wage" have seriously misguided intentions. Many academic economists agree that a higher minimum wage will cause greater unemployment. The people who would get hurt by this potential lack of jobs the most are the same people the government purports to help: women, minorities and teenagers. \nA September 1999 editorial in Investors Business Daily explains minimum wage in this manner: "Minimum wage laws … are particularly damaging to low-income workers … Employers who can afford to pay four workers $5 an hour can't afford them all at $6 an hour. Somebody has to go. So, three are marginally helped -- a fourth is simply without a job. And the fifth, sixth and seventh don't get hired in the first place." \nThe article goes on, "The Employment Policies Institute figures that the first 50 cents out of the $1 hike in the minimum wage in 1996 through 1997 cost 645,000 jobs."\nI couldn't put it any better. A low-paying, entry-level job is the opportunity for those with few marketable skills to get their feet wet. I would be willing to bet that many McDonald's managers started out flipping burgers.\nThe belief that minimum wage hikes cure poverty is a myth. If it was true, why not make everyone rich and set the minimum wage at $75 per hour? Obviously, that would never work; small businesses wouldn't be able to operate with the financial strain and those willing to work for less would be shut out of a job. Poverty would actually increase!\nWhatever happened to the old slogan, "you get what you pay for"? Shouldn't the employer decide what is the fair value of labor? If employees feel they are being underpaid, they can leave. I felt I was being underpaid (in comparison to fellow employees) at my summer job last year. I was hardworking, honest and very experienced. I said to my boss, "If I am to continue working here, I'd like a raise." \nRealizing what was at stake, my boss gave me the raise; without that raise, though, I would have quit. The minimum wage didn't help me one bit, but my parents, through their experience, taught me how to recognize my own value as a worker in the labor market. \nEconomist Walter Williams says, "The real problem for low-skilled workers is not that they're underpaid, but they're underproductive. The solution is to improve their skills and education." \nYoungsters can learn very valuable lessons about respect, punctuality and attitude from working. \n If low-skilled laborers are not hurt by minimum wages, why did Congress push the Welfare-to-Work Tax Credit and the Work Opportunity Tax Credit so hard? These tax credits allow an employer to lower his wage cost for those entry-level workers by 35 percent or to $3.33 per hour. In other words, politicians proposed to sacrifice the minimum wage in order to move people from welfare to the workforce and provide more opportunity for low-skilled workers. Isn't that what economists have been saying all along? It appears most politicians are allergic to facts. \nIn 1987, an editorial in the New York Times said minimum wage laws would "raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired." I can already see how the abolishment of the minimum wage would bring all sorts of media propaganda with images of starving families and children. How little people know of the real consequences of a "living wage"