Presumptive Democratic presidential nominee Hillary Clinton backs a federal minimum-wage hike from the current $7.25 per hour to $12 per hour and praised the New York City Wage Board’s decision that fast-food workers should make $15 an hour.
This move was predictably divisive.
Retail workers wanted to know: “Hey, what about us? Why should only McDonald’s burger flippers get this raise?”
But the divide caused by such unilateral and arbitrary decisions extends beyond New York’s tussle between MeDonald’s order takers, who now will be paid $15 an hour—at least those lucky enough to keep their jobs will be—and cashiers at Costco next door who remain at a $9 hourly wage.
Bernie Sanders, the sloppy Socialist and Clinton’s fast-fading primary opponent, conveniently dodges any discussion about how his plan to raise the federal minimum wage to $15 an hour will threaten complete removal of the bottom rung of the employment ladder for young, inexperienced, low-skilled and less-educated workers.
The real head scratcher here is that those are the very same people who form the core of the Bern’s campaign constituency.
Heaping helpings of hypocrisy on the part of labor unions regarding minimum-wage hikes also accompany the head scratching.
The AFL-CIO wants the Los Angeles City Council to exempt unions from the city’s $15-an-hour minimum wage, even after it led a campaign earlier this year to force such a wage hike on the entire state of California while vehemently opposing any exemptions for restaurant workers, nonprofits or other small businesses.
The higher such hypocrisy rises here, the dizzier I get.
Some Kentucky big-government politicians are following Sanders’ strategy of avoiding any discussion about the unintended consequences of hiking the commonwealth’s minimum wage while offering preposterous positivity about such a move.
For instance, House Speaker Greg Stumbo, D-Prestonsburg, categorically denied that his bill during this year’s legislative session, which proposed an enormous 40-percent hike in the state’s minimum-wage rate, would hurt Kentucky’s unemployment rate, which currently stands higher than that of 30 other states.
Stumbo claims that unemployment rates actually fall in states that hike their minimum wages.
However, recent research by Jeffrey Clemens and Michael Wither at the University of California San Diego on the effect that the minimum wage had on the employment and income trajectories of low-skilled workers during the Great Recession reveals how 1.4 million jobs were destroyed by the increase of the federal minimum wage during the late 2000s.
The study reports that the federal government’s minimum-wage increase from $5.15 on July 23, 2007, to $7.25 on July 24, 2009, caused the employment-to-population ratio to decline substantially—by 4 full percentage points among adults between 25 and 54 years old—and twice that amount among 15-to-24-year-olds.
Ben Gitis, American Action Forum’s labor market policy director, notes a 22.5 percent average unemployment rate in 2013 among teens in states with minimum wages above the federal $7.25 federal mark.
Gitis claims that in Oregon and Washington—states often held up as trend setters by those obsessed with raising government-mandated minimum wages—teen unemployment rates increased by 8 percent and 9 percent, respectively, in 2013 alone.
But Sanders and his naïve flock have little interest in, concern—or even knowledge about—the fact that when governments force businesses to pay a worker $15 to make a milkshake, the bottom rung of the employment ladder is removed and with it, the opportunity to give a greater number of young people the jobs and work experiences needed to help them climb the ladder of—and to—success.
Shepherd Stumbo apparently doesn’t, either.
Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at email@example.com. Read previously published columns at www.bipps.org.