The Case Against a Higher Minimum Wage

The Case Against a higher(prenominal) Minimum take raising the stripped-down wage hurts the unfortunate. It takes away jobs, keeps nation on wellbeing, and encourages high-schooling students to toss out. Policy makers should be clear on the meaning of higher token(prenominal) wages. Jobs and the Minimum Wage Economists have studied the job-destroying features of a higher minimum wage. It is measurable to recognize that the jobs lost argon in the main entry-level jobs. By destroying entry-level jobs, a higher minimum wage harms the lifetime wages prospects of low-skilled workers.Side Effects of Raising the Minimum Wage It has been well put down that the minimum wage destroys jobs, particularly the jobs of low-skilled, young workers. However, there are other equally pernicious side effects of higher minimum wages. higher(prenominal) minimum wages make it more voiceless for people to trust welfare and induce high-school students to drop out. Dr. Peter Brandon of the Insti tute for Research on Poverty studied how raising the minimum wage affect the passageway from welfare to work. 7 He found that raising it keeps welfare mothers on welfare longer.Mothers on welfare in states that raised their minimum wage remained on welfare 44 perpenny longer than mothers on welfare in states where it was not raised. 8 The reason for this result is that raising the minimum wage induces roughly people to enter the labor market who would not apply if not for the higher level. With a larger labor market, employers choose higher-skilled applicants. Thus, raising the minimum wage hurts low-skilled workers in two ways. First, there are fewer jobs available. Second, with a larger pool of applicants, competition is stiffer.Low-skilled workers have a more concentrated time getting those job skills that are crucial to economic well-being. some other side effect of raising the minimum wage is that it increases the number of high-school students who drop out. 9 Some of these students do not find employment. Another group of students are part of those applicants that compete jobs away from welfare recipients. Dropping out of school is very destructive. High school drop-outs have a very difficult time improving their well-being. The Elusive Benefits of a Higher Minimum WageThe proponents of a higher minimum wage argue that it is vitally important to raise it in order to improve the lives of poor workers. However, the raise pass on have only a limited impact on poor working families. 10 A single parent with two children living in California would gain only 26 cents from a 90 cent increase in the minimum wage. To put this gain in perspective, distributively minimum wage worker who earns $4. 25 an hour brings home $3. 92 for each hour worked once payroll department taxes are deducted. The employer costs of a minimum wage worker is $4. 8 an hour when the employers share of the payroll tax is included. 11 If workers could take home the amount of money it c osts the employer to pick out workers, they could have 62 cents more per hour. Clearly, the California parent would be breach off if the tax wedge were reduced, rather than increasing the minimum wage. resultant we need a system that maximizes opportunities for economic well-being of low-skilled workers. Raising the minimum wage is a wrong-headed solution that will deprive young, poor Americans of an opportunity to improve their economic situation.