Minimum wages: Maximum spin
March 11. 2014 5:47PM
Supporters of raising the minimum wage do not tell the truth about the minimum wage. If they did, it would never be raised. As an example, we publish on the opposite page an op-ed from New Hampshire House Speaker Terie Norelli, who hopes to pass a minimum wage hike in the House today. Let's review her claims together.
Norelli writes that the "average" minimum wage earner is "an adult, at least 20 years old who works full time...." But the Pew Research Center calculated last year that 64 percent of minimum-wage earners work part time. Slightly more than half (50.6 percent) are younger than 24, with nearly a quarter (24 percent) being between 16 and 19.
Government data show that the average family income of minimum-wage workers is more than $53,000 a year. Sixty-two percent of minimum-wage earners are students, a Heritage Foundation analysis of government data shows.
Norelli portrays them as working for national corporations that are "profitable and financially strong." But the law does not single out those businesses. It would apply to all employers, including struggling mom-and-pop businesses in New Hampshire.
Near the end, Norelli produces this whopper: "While some will claim that raising the minimum wage will increase unemployment, studies have shown the opposite to be true."
The dishonesty is breathtaking. Just last month the Congressional Budget Office concluded that a federal minimum wage hike "would reduce total employment by about 500,000." A National Bureau of Economic Research review of more than 100 minimum-wage studies in 2006 found "relatively overwhelming evidence of stronger disemployment effects" for "the least-skilled groups."
The best way to help American employees is to spur economic growth. The percentage of hourly employees who earned the minimum wage was no more than 3 percent from 2001-2008. The recession and post-recession Obama "recovery" have kept it above 4.7 percent ever since. When Ronald Reagan took office in 1981, the figure was 15.1 percent. By 1989 it was 6.5 percent. Want low-wage workers to earn more? Stimulate hiring and wage growth by reducing regulatory and tax burdens.