Minimum Wage

Wednesday, Dec 29, 2010

In 2009, 95% of hourly paid workers earned more than the Federal minimum wage.

The proportion of hourly-paid workers earning the prevailing Federal minimum wage or less in 2009, at nearly 5 percent...

Characteristics of Minimum Wage Workers: 2009, U.S. Bureau of Labor Statistics, March 1, 2010, http://www.bls.gov/cps/minwage2009.htm.

Labor economists who had studied past wage hikes warned that higher wages were not a free lunch; there would be a price to pay. Decades of prior research established a basic economic truth: When forced to hire and train unskilled new employees at increased wages, employers search for ways to offset that cost. Sometimes, it translates to higher prices for customers; other times, it translates to fewer hours and fewer jobs for less-experienced employees.

This study found that the federal minimum wage hikes that drove the minimum wage from $5.15 to $7.25 between July 2007 and July 2009 led to significant employment losses for teens. In the 19 states where the effective minimum wage was increased by $2.10, we estimate that teen employment dropped by 6.9 percent, and approximately 98,000 jobs were lost. For the teen population with less than 12 years of education completed, teen employment dropped by 12.4 percent, and approximately 82,000 jobs were lost. These estimates are fairly conservative in the sense that they do not account for lagged effects of minimum wage hikes.

The Teen Employment Crisis: The Effects of the 2007-2009 Federal Minimum Wage Increases on Teen Employment, The Employment Policies Institute, July, 2010, http://epionline.org/studies/even_07-2010.pdf.

The statistical record proves that the minimum-wage law creates teenage unemployment, especially among minorities. For example, in 1948, when the effective minimum wage rate was much lower, white teenage unemployment was 10.2 percent, while black unemployment was 9.4 percent. Today, white youth unemployment is 13.9 percent, whereas black is 33.4 percent.

The Minimum Wage, James M. Liebler, December 1995, http://www.fff.org/freedom/1295d.asp.