Thursday, September 29th, 2016

Hurting those they’re claiming to help – the living wage

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At the MacIver Institute this week, I take the reader a little bit deeper into the numbers on who earns the minimum wage, and what is beyond the demand for $15 per hour. An excerpt:

But what the supporters of a “living wage” minimum wage fail to understand is that the minimum wage was not meant to be family supporting. It is entry-level pay for those just entering the workforce. With time and experience, a person’s ability to earn more allows them to take the next steps towards the American dream.

In fact, a higher minimum wage is actually hurting those at the economic bottom that groups like “Raise Up MKE” are claiming to help. According to research by the MacIver Institute last year, 7,109 more people are unemployed because of increases in the minimum wage since 2005.

It’s not hard to understand why. As the cost of labor increases the demand for labor decreases, and this is especially true for entry level and unskilled positions.

Ironically, leftwing magazine The Nation recently re-learned this valuable economic lesson, according to ProPublica. The magazine decided to actually pay their interns the minimum wage in an effort to be more “fair” instead of merely offering them stipends. They’re not even offering the “living wage” advocated for by the left, yet they are paying for this increase in wages by offering two less internships and requiring interns to take on more responsibilities.

The next time the Capital Times’ John Nichols lectures on a living wage, someone should ask him how it’s working out for The Nation where he writes.

The example of The Nation reminds us who is getting the minimum wage. This is not about raising families for the most part.

According to the Heritage Foundation, relatively few of minimum wage earners live below the poverty line. The average family income is over $53,000 a year, and just over half of the workers are between the ages of 16 and 24.

The older workers earning the minimum wage are admittedly not in the entry level category, but a significant number of them are supplementing the family income rather than being the sole source. Over half of them are working in part-time jobs and they have an average family income of $42,500 per year. According to the Heritage Foundation, 62 percent have incomes over 150 percent of the poverty line.

Of course, these numbers get lost in the coverage of picketers outside the local McDonalds and people walking off their jobs. Meanwhile, highly paid union organizers are content to either ignore the numbers or purposely avoid talking about how unemployment would actually go up with a higher minimum wage.

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