The Minimum Wage Typifies Much That Is Wrong with Washington | Cato Institute

The Minimum Wage Typifies Much That Is Wrong with Washington | Cato Institute: "In 1977 Congress established the Minimum Wage Study Commission. The panel concluded that the “time-series studies typically find that a ten percent increase in the minimum wage reduces teenage employment by one to three percent.” Similar were the results of more recent research. Observed businessman Brandon Crocker, “most studies of previous [pre-1996] rate hikes (such as 1990-1991) show clear evidence of job losses.”

A 2007 review 102 studies starting in the 1990s by David Neumark and William Wascher found: “although the wide range of estimates is striking, the oft-stated assertion that the new minimum wage research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect. Indeed … the preponderance of the evidence points to disemployment effects.” Studies which did not do so were more likely to be industry specific and short-term, which may have influenced the results."

"James Sherk of the Heritage Foundation pointed out that in 2011 and 2012 only 2.9 percent of all workers earned the minimum, and that figure included service workers who earned enough in tips to move them above the minimum. Just .6 percent of full-time workers and 1.7 percent of full-time hourly workers earn the minimum. Even 77.2 percent of teens earn more than the minimum. Explained Wilson: “The higher the minimum wage relative to competitive-market wage levels, the greater the employment loss that occurs.”"

"What is certain is that when jobs disappear those with the least education, training, skills, and experience suffer the most. This means younger and minority workers. For instance, a 1973 study by economist Douglas K. Adie concluded that a ten percent increase in the real, inflate-adjusted minimum wage increased teen unemployment by 3.62 percent."

"The minimum wage is a major reason for the persistent gap between unemployment rates for black and white teens and young adults."

“the consequences of the minimum wage for black young adults without a diploma were actually worse than the consequences of the Great Depression.”

"Minimum wage increases rapidly accelerate the rate at which technological innovations replace entry-level jobs."

"A score of studies have found a modest impact on prices—an average of .4 percent for every ten percent rise in the minimum. Restaurants appear to be particularly prone to such increases. A 2011 study found that price hikes in this industry were more common than employment cuts, accounting for roughly two-thirds of the cost increase.

Price hikes can claw back wage gains. Said Romer: “Often, the customers paying those prices—including some of the diners at McDonald’s and the shoppers at Walmart—have very low family incomes. Thus this price effect may harm the very people whom a minimum wage is supposed to help.”"

"some employers responded by reducing pay raises for other workers. In addition, explained Wilson: “Some firms try to increase worker productivity by requiring better attendance, insisting that job duties are completed faster, imposing additional tasks on workers, minimizing hours worked with better scheduling, and terminating poor performers more quickly.”"

“Since 1995, eight studies have examined the income and poverty effects of minimum wage increases, and all but one have found that past minimum wage hikes had no effect on poverty.”

"just 11.3 percent of minimum wage workers live in a poor household. The average income of families with minimum wage workers is above $53,000, more than twice the poverty line for a family of four. Nearly two-thirds of recipients live in homes with incomes at least twice the poverty line. Just 16.8 percent of teen minimum wage workers live in homes below the poverty line."