minimum wage

States that raised their minimum wages have seen a huge loss in job growth since the beginning of the year

The thirteen states that saw minimum wage increases on January 1 have kept a combined 129,200 workers out of employment opportunities since the beginning of the year, according to data published this week by the American Action Forum.

The bulk of the minimum wage hikes were automatic inflation adjustments already mandated by state legislatures. Four state legislatures, however, took specific action to raise their minimum wages, the increases of which range from 45 cents to $1 per hour.

“While many assume that it would come out of profits of large companies, in reality it only affects restaurants and retail businesses that have narrow profit margins,” Ben Gitis, a policy analyst at the American Action Forum, explains in the study. “They have no choice but to either reduce their current employment levels or put off plans to expand and make new hires. As a result, the cost of the minimum wage comes out of the pockets of unemployed workers who are denied an opportunity to work.”

The study looks specifically the impact of these minimum wage increases in the restaurant and retail industries. States that raised their minimum wages have seen an anemic 0.6 percent net-job growth in these two industries since the beginning of the year, while states that kept their laws unchanged saw a 2 percent increase in net-job growth.

Gitis concedes that an unusually cold winter may have had an impact on overall job growth, but notes that states that raised their minimum wages “experienced relatively warm weather” than states in which wage laws remained unchanged. He also points out that other factors may have come into play.

To Help The Poor, To Not Help The Poor

Republicans in the Senate blocked legislation this week that would increase the federal minimum wage. Currently, the federal minimum wage level is at $7.25 an hour and the failed proposed increase would have raised it to $10.10 an hour. Democrats promoting the bill claimed it was a strong way to combat poverty.

The expected outrage at the failure of the bill included sound bites from an angered Obama aimed at Republicans, saying, “They said ‘no’ to helping millions working their way out of poverty.” Republicans responded to the many criticisms citing the CBO report showing that 500,000 jobs were expected to be lost if the increase was passed.

Though that is a great argument to make since it is quite difficult to work your way out of poverty if you no longer have a job, it is not the only one. The options for a business owner that is presented with a forced increase to labor costs include raising prices and cutting hours as well as cutting jobs entirely.

So, from the view of a poverty stricken minimum wage worker these options look just as bad. They are faced with an increase in the prices of goods and services they need. Not to mention they now run the risk of having their hours cut or losing their job entirely.

How many people in poverty would see an increase in pay because of this bill? According to the Census Bureau, in 2012, nearly 60% of those living at or near the poverty level were not in the workforce, meaning an increase in wage would not help.

Thomas Massie, Justin Amash to Participate in War On Youth Town Hall

YAL War on Youth Townhall

The current prevailing political trends have been failing the predictions of their original proponents.

Higher minimum wages and the implementation of health care mandates that force companies to spend more to maintain employees on the payroll are just a few of the many policies that have been linked to the many difficulties that teens and young adults have been facing in the past decade.

The current job market for teens is the toughest on record and the type of solutions that are now being supported by the Obama administration do nothing to solve the problem but aggravate it. Once higher minimum wages kick in, the current administration’s solution will prove to be yet another impediment to the entry of inexperienced or young individuals with little or no experience in the workforce.

Because these policies lead to constant harassment that young Americans are forced to struggle with daily, Congressmen Justin Amash (R-MI) and Thomas Massie (R-KY) will be participating in a “War on Youth” town hall, which will take place in Arizona.

The Glendale Community College chapter of Young Americans for Liberty will host the event. If you can’t make it, YAL will be broadcasting the event live online on April 3, at 7 p.m. EDT or 4 p.m. PDT.

Viewers can send in their questions to both congressmen by using the hashtag #WarOnYouth.

Current Job Market for Teens is the Toughest on Record

Thomas Sowell used his latest piece to address a common misconception regarding the left’s avowed concern for minorities. In his column, the renowned economist pointed out that the educational policies pursued by the left in the name of the poor and the minorities often hurt those they claim to protect.

The same can be said about other policies pursued by Democrats who tend to defend that more interventionism will undoubtedly lead to more opportunities for the poor, the young and the minorities.

According to a Brookings Institute study, teens have been having a harder time finding jobs in recent years. In 2000, research shows that 45% of teens in the U.S. had jobs, now only 26% of teens aged 16 to 19 are employed.

Researchers used Department of Labor and Census data to track youth employment among the 100 largest metro areas in the country. The study shows that 1.8 million teens are either actively looking for a job but are unable to get one or they have part-time jobs, whereas they’d prefer to obtain full-time employment instead. The study refers to this pattern as “underutilization,” which means that teens are not satisfied or financially stable to focus solely on school.

In other words, more teens need to work but are unable to find work.

CBO: Minimum wage hike would cost 500,000 jobs

An ever-increasing federal minimum wage is a statist panacea. Even Mitt Romney supported tying it to inflation in the 2012 campaign. But the CBO on Tuesday released its report scoring the proposals, and the numbers aren’t good.

If the minimum wage were raised on $10.10, as the Obama administration has proposed, somewhere between 500,000 and 1 million jobs could be lost over the next two years:

Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects. As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million worker

Economists and politicians have debated for decades about the minimum wage’s effect on employment, but the non-partisan government calculator has spit out a decisively negative result, at least for employment.


Adding more salt to the wound, the CBO finds that raising the minimum wage also won’t be the immediate fix for poverty that many thing it would:

The increased earnings for low-wage workers

Obama Uses Pen to Price Workers Out of the Market

President Obama made good on a threat…ah, promise…yesterday and, using that executive order pen he likes to talk about and wave around, raised the minimum wage for federal contractors from $7.25 to $10.10, representing a nearly 40% spike:

Mr. Obama said the federal minimum wage needs to be raised across the board because the current rate, due to inflation, “is worth about 20% less than it was when Ronald Reagan took office – 20% less, a fifth less.”

The move is the first step in a broader fight over the minimum wage being pushed by Democrats during an election year and part of the president’s effort to narrow the income inequality gap. (Our colleagues at the Real Time Economics blog take a look at who benefits from a higher minimum wage.)

Now, it’s just for federal contractors — with, to WSJ’s point, an eye toward a campaign issue — but it’s still not a very good sign because it’s likely a shallow move to gain political favor that sets a bad example for a couple of different reasons.

First, it’s yet another swipe at Congress who, as much as they are fairly maligned, are still the colleagues with whom our President must work. And quotes like this one are, frankly, rude and counter productive:

State of the Union Promises Millennials the Short End of the Stick

Contained within last night’s speech were many examples of how young people lose out in the big-government status quo.

It’s easy to lampoon the State of the Union address. A speech full of pomp and circumstance but relatively devoid of specifics is difficult to take seriously.

Few can see through the charade more clearly than younger generations. Marketers and ad execs know that traditional TV marketing techniques are ineffective with Millennials, so it’s obvious last night’s promises are liable to fall particularly flat with 20-somethings.

Young people today face a government that is more bloated, more invasive, and less efficient than ever. Tuesday night’s speech promised to continue this status quo.

The State of the Union was a study in contrasts and omitted information, and young people can see right through it. The President praised a low unemployment rate – leaving out the fact that the job-seeking numbers are low because many people have given up on finding work. He touted a reduced deficit – while praising the end of the Budget Control Act and sequester that led to the reduction.

Low incomers are better off now in spite of lower minimum wage

President Obama’s statement concerning the lack of solid evidence supporting that a higher minimum wage costs jobs, has already been fact-checked and the results were everything but favorable. To the President.

Supporters of a higher federal minimum wage often overlook the importance of observing changes to the conditions of those who would be affected by such policy. They simply assume that the results should be favorable considering that everybody’s wage would go up. Like magic, everyone would suddenly become a little richer.

Aside from the obvious disincentive companies will have to factor when looking into hiring once a higher minimum wage law kicks in, supporters of an increased federal minimum wage simply ignore the fact that we, as a nation, have not been relying on the minimum wage as much as Americans did 20 years ago. Policy has already shifted in order to focus on poor families, which has made low incomers earn much more today than they did 40 years ago.

While it’s true that the federal minimum wage is actually lower now than it was in the 1960s, people who are earning minimum wage now are not poorer than those earning minimum wage back in the day, and that’s due to other policies entirely.

Everyone’s ideas are racist except mine

There are a few ways that a policy gets to be called racist: it is intended to negatively affect one race over another, it results in a negative affect on one race over another regardless of intent, or it has historically been used to negatively affect one race over another regardless of present intent or eventual result.

The first two are justifiably used to disqualify certain policies; of course we shouldn’t enact things that are intended to or serve to foster racial discrimination. But the latter is used as a fallacious smear tactic almost exclusively against conservative and libertarian policies. If that’s how we’re going to debate, it’s long past time the historically racist origins of certain liberal policies got considered too.

Federalism gets a bad rap obviously because of slavery and Jim Crow laws. The mantle of states’ rights was used for a long time as a means to get away with any number of heinous injustices and atrocities. That is almost never the case today, yet one risks being labeled racist for suggesting it, whether the issue to which federalism is to be applied has anything to do with race or not.

Well, if the putative federalist in question is a Republican, that is. Democrats are free to cling to states’ rights when it is convenient without having to worry about similar ad hominem attacks. Even after President Obama’s hailed conversion on the issue of gay marriage, he maintains that states should be free to decide the issue themselves.

This is effectively the same position as most elected Republicans, yet he doesn’t get called names because of it. Even the President’s signature health insurance reform grants states tremendous discretion in how much of the law’s new bureaucracy to implement themselves. Has anyone called Obamacare racist?

Have some fries with that executive order

The All-Nite Images (CC)

Because ObamaCare is such a complete failure, the president is at least slightly welcoming the latest distraction to keep the masses from noticing that problem. Protestors took to the streets demanding that the government not only increase the minimum wage, but essentially double it. Of course, while that might seem like a nice idea for people that are barely making it by with low wage jobs, it would not work out very well for them in the end.

Forbes explored this issue at length a while ago, but their findings remain just as true today. Slight increases in the minimum wage have been shown to cause job losses, as companies downsize to absorb the increased costs of their labor force. One thing that has changed is the effect of ObamaCare on the situation. Many employers are already looking at cutting hours of low wage workers to avoid the increased costs of benefits for employees.

Liberals are demonizing this action, and are still demanding higher wages, while ignoring what should be obvious. Increased costs must be paid one way or another, whether by cutting labor costs, increasing prices for consumers, or a combination of the two. Since the latter is a likely solution for many companies that employ low wage workers, that would mean the continuation of a vicious cycle for the very people that liberals would hope to help by increasing the minimum wage in the first place.

Low wage workers tend to use the goods and services of companies like fast food restaurants and WalMart, so even if their wages are increased, it probably will not help them very much in the end. A pay raise doesn’t do much good if the price of goods and services goes up, too.

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