The Pew Center on the States is reporting that ten states voted to raise the minimum wage for workers in 2013. Teens and low-skilled workers should be protesting in response. According to the report,
Nine states will adjust the wages to accommodate the rising costs of living, as required by state laws, while Rhode Island will implement a law signed by the governor in June that raises its minimum wage to $7.75 per hour. The wage hikes range between 10 cents and 35 cents per hour, adding between $190 and $510 to the average affected worker’s annual pay.
In Washington State the rate will rise to $9.19 per hour, the highest in the nation. While this may sound like good public policy these wage increases actually hurt the very same people they intended to help. Whenever lawmakers decide to arbitrarily determine the price of labor (wages) we need to stop and ask this simple question, “where are employers going to find the money to cover the wage increase?” It has to come from somewhere. Why is that not a natural “next question?”
As I have said before, minimum wage increases hurts teens and low-skilled minorities the most because minimum wage jobs are usually entry-level positions filled by employees with limited work experience and few job skills. When the government forces employers to pay their workers more than a job’s productivity demands, employers, in order to stay in business, generally respond by hiring fewer hours of low-skill labor. Low-skill workers become too expensive to employ, creating a new army of permanent part-timers.
Washington State, for example, with its 2011 $8.67 minimum wage also had one of the nation’s highest teen unemployment rates at 34.5% in that same year. The tragedy is that lawmakers seem incapable of connecting the wage increase/opportunity dots. In the meantime, teen and low-skilled workers continue to suffer the consequences of politicians meddling in the market place while business gets blamed for being greedy.