Employment Study: Minimum Wage Hike Means More Poverty

Thursday, 14 Mar 2013 02:54 PM

By Dan Weil

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
President Barack Obama and congressional Democrats are making a mistake in seeking a higher minimum wage, says Michael Saltsman, research director of the Employment Policies Institute.

“Both are united in their belief that a higher minimum wage can reduce poverty without reducing employment,” he writes in Politico. “They’re wrong on both counts.”

A Journal of Human Resources studies indicates increasing the minimum wage can move more people into poverty than out of it, Saltsman says.

“Here’s why: an increase in someone’s hourly wage won’t translate to an increase in their annual take-home pay if they lose hours or employment as a result,” he says. “That’s exactly what’s happening. Employers who keep just 2 cents to 3 cents in profit from each sales dollar (think: restaurants or grocery stores) can’t just absorb a 39 percent hike in labor costs.”

Saltsman says they either have to raise prices, or more likely, find a way to provide the same product with less service because many of their customers can’t afford to pay higher prices.

“This means fewer hours of work and fewer opportunities for less skilled groups like teens, who already face a 25 percent unemployment rate,” he writes.

“That’s why a new Employment Policies Institute analysis of Census Bureau data finds that roughly 988,000 jobs would be lost because of the Harkin/Miller [minimum wage] proposal [in Congress], with 30 percent of the lost jobs occurring in the retail industry and 29 percent occurring in accommodations and food service.”

The bill introduced by Iowa Sen. Tom Harkin and California Rep. George Miller would raise the minimum wage from the current $7.25 per hour to $10.10. per hour.





© 2014 Newsmax. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Fresno School Slammed for Hiring White Teacher for Cultural Studies

Tuesday, 29 Jul 2014 16:25 PM

A flap over whether a white teacher should lead a class on African-American, Latino, and Southeast Asian cultural studie . . .

Fla. State Senator: Make Students See Movie 'America'

Tuesday, 29 Jul 2014 16:18 PM

Florida state Sen. Alan Hays wants students in the Sunshine State to learn real U.S. history, he tells Newsmax TV. . . .

California Insurance Rates Soar Up to 88% After Obamacare

Tuesday, 29 Jul 2014 15:48 PM

Health-care insurance premiums for individuals in California rose between 22 percent and 88 percent in 2014 from last ye . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved