Well-meaning people advocate raising the "learning wage" to $7.25, declaiming even this is not enough to live on. If people can't survive on $7.25 per hour, why the hypocrisy? Why not raise it to $35 an hour as New York labor unions are advocating?
My very first job paid less than minimum wage. My boss thought I should first learn to show up for work on time and docked me when I didn't. He also insisted I learn to show up the day after payday when my buddies wanted to celebrate. So he started me out in his small five-man company at a "learning wage." That's really what a minimum wage is, a learning wage. It's not supposed to support a family. After many years of wage increases I eventually wound up owning the company.
In 2004, according to The Department of Labor, those earning the federal minimum wage or less made up 2.7 percent of all hourly-paid workers. And one-tenth of those who were heads of families qualified for Earned Income Tax Credits to supplement their wages.
It's extremely rare for a person who can read, write and speak English to be stuck at the minimum wage for more than a year. According to the Bureau of Labor Statistics, 63 percent of minimum-wage workers receive raises within one year of employment. Less than 1 percent of all wage earners earn the minimum wage after three years.
While it's claimed there's no impact on employment, as government-imposed wage rates rise, so do job qualifications; therefore, less-skilled workers become "unemployable." Advocates for increasing the minimum wage apparently believe it's better to have no job than a low-paying job. One result of raising the "learning wage" has been millions of idle, restless teenagers on the streets with a lot of time on their hands for mischief.
The irrefutable evidence from the Department of Labor shows that every time the minimum wage has been raised since 1948, unemployment has increased. If you track the federal minimum wage, you'll see that unemployment among teenagers, particularly minorities, increased from 9.4 percent among blacks in 1948 to 32.5 percent in 2004, and from 10.2 percent for whites to 17.2 percent in 2004. Yes, blacks formerly had lower unemployment rates than whites. To update Nobel laureate Paul Samuelson's 1976 statement: "What good does it do a black youth to know that an employer must pay him $7.25 per an hour if the fact that he must be paid that amount is what keeps him from getting a job?"
The minimum wage makes many people unemployable while helping a few at the expense of others. Why is this so? Well, economic law tells us that if the price of any good increases people buy less. This is true for gasoline. It's true for cell phones. It's true for blackberries. I love blackberries. When they're $4.99 a box I don't buy them. When they're $1.50 I may buy them. When they're 99 cents I buy five boxes at a time.
It is also true for labor services. Economist Thomas Sowell points out that, "Every one of us would be 'unemployable' if our pay rates were raised high enough." You don't think so? Go demand that your boss double your salary right now. Do you think your job would be more secure if the government demanded that your boss double your salary?
Many people, of course, could care less about raising the minimum wage for just 3 percent of those unskilled workers. They really want to raise the wages of the 97 percent above that bracket, as the more skilled, educated and experienced workers up the ladder demand higher wages than those who aren't.
When I was young all elevators had operators in every car; gas stations had people washing your windows, pumping gas and checking your oil; newspapers were delivered by teenagers (including myself); and millions of neighbor's lawns were also mowed by teenagers. Continuous increases in the "learning wage" over time abolished millions of these jobs for teenagers. Petty thefts and vandalism by restless teenagers have continuously gone up as the jobs have disappeared.
If increasing wages by government edict truly has no significant adverse impacts, as many advocates claim, then we should tell the Chinese, Indian, African and South American governments that all that's needed to be as rich as America is to pass a law and simply mandate higher wages.

Friday, March 3, 2006

Schnaubelt, president of Citizens for Private Property Rights, has been a commercial real estate broker for 39 years and was a San Diego City Councilman from 1977-81.

                      Fred Schnaubelt
                            Fredrick Schnaubelt & Sons

                                                                               San Diego CA               Copyright © 2003-2009  San Diego Issues, Inc.^tm - All rights reserved
                                                                                   619.224-8584                                               E-mail        Webmaster              Disclaimer