The Minimum Wage Myth

If you have watched the news at any point over the last year or so you surely have seen the mass rallies in various big cities throughout America. The rallies have consistently been large and boisterous as workers cry out for an increase in the minimum wage or a decent living wage. Most have been calling for at least a $15 per hour minimum wage. That is more than double the current federal minimum wage of $7.25 per hour. The claim from the progressive liberals is that workers just can't support a family with that paltry minimum wage. So what are the facts?

According to the Bureau of Labor Statistics, there are roughly 3.6 million workers at or below minimum wage in America. Of those workers, 31% are teens and 55% are 25 years old and below. That leaves roughly 1% of all minimum wage workers over 25 years old. So we are truly talking about a very minute fraction of the country here. The BLS reports 63% of workers who earn less than $9.50 per hour are second and third wage earners in the family and 43% of those workers live in households that earn $50,000 per year or more. Clearly, most of the minimum wage workers are teens from middle-class families. In 1980, 15% of the workforce was at minimum wage or less. That number is now around 4-5%, and two-thirds of that group is in the service industries.

Seattle, WA passed a minimum wage law last year that raises the minimum wage to $15 per hour by 2017. The results are slowly filtering in and it hasn't been quite what the progressive liberals imagined. From January thru September of 2015, Seattle lost roughly 700 jobs in the restaurant and food service industry while the rest of the State of Washington gained almost 6,000 jobs. Businesses had to cut costs to account for the increased minimum wage and thus did without a couple workers to compensate. Fast food places like McDonald's have started to implement self-service kiosks that don't require any workers to punch in orders. The free-market economy adjusts to changing situations and adapts to continue to make a profit. Basic economics at work.

So as the Democrats continue to pander for votes it is important to understand that this is really about redistribution of wealth and class warfare. When the minimum wage is raised workers are priced out of the market. Those workers tend to be the young and minorities. The same people the Democrats claim to want to help. The more uninformed and uneducated people will continue to buy into the myth and readily cast votes to elect them. But, as John Adams said, "Facts are stubborn things." Hopefully, the facts and truth will stubbornly find their way into this minimum wage debate.