Raise The Minimum Wage?

This week I received an email from U.S. Senator Sherrod Brown, of Ohio, about the federal minimum wage, which currently is $7.25.

Senator Brown supports raising the minimum wage for several reasons.  First, a minimum-wage worker would earn $14,500, which does not allow families to make ends meet and would put a family of four below the poverty line.  Second, the minimum wage hasn’t been raised since 2007.  Third, 30 million people are paid the minimum wage, and Senator Brown describes them as hard-working people who “bring in the same paycheck year after year” while the price of other goods increases.  Fourth, Ohio and other states have slightly higher minimum wage rates.  Finally, he says a raise is a “good, common-sense idea” because “[t]he more money in people’s pockets, the more they’ll spend.”

I don’t buy the arguments.  By definition, the minimum wage is reserved for low-skill, entry-level jobs — the kind high school kids get as their first work experience.  Workers then move up the scale as they gain experience and skills.  I’m skeptical there are many families of four whose income is wholly dependent upon one minimum-wage worker, or that such people are paid the minimum wage “year after year.”  Even if those families exist, we shouldn’t build federal economic policy around such outliers.  The fact that the minimum wage hasn’t been raised since 2007 also means nothing.  Since 2007, America has been mired in a brutally long recession, and unemployment still remains far too high.  There’s nothing in our economic performance since 2007 that supports raising the minimum wage.  To the contrary, with employers already skittish about the economy and nervous about hiring — particularly given the still-uncertain impact of the Affordable Care Act — the likely effect of raising the minimum wage will be to discourage hiring.  In short, far from putting money in people’s pockets, raising the minimum wage is likely to make it even harder for kids to find that first job and to leave more people unemployed.

If Ohio and other states want to require employers to pay a bit more, that’s fine — but it doesn’t mean the federal wage must follow suit.  If the stronger economies and hiring patterns in some states warrant higher rates, let the state governments that are more familiar with local conditions make that decision.  We don’t need edicts by the faraway federal government to control every aspect of our economy.

I think raising the minimum wage right now is a bad idea.

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