The Minimum Wage Workforce Myth
Religion & Liberty Online

The Minimum Wage Workforce Myth

During his recent State of the Union address, President Obama argued for increasing the federal minimum wage:

100930_minimum_wageEven with the tax relief we put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong. That’s why, since the last time this Congress raised the minimum wage, 19 states have chosen to bump theirs even higher.

Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. We should be able to get that done. This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets.

Are there really millions of working families earning less than the the minimum wage? Mark J. Perry explodes that myth:

The notion that there are millions of full-time workers struggling to raise a family, but are stuck in jobs paying the minimum wage for long periods of time is more myth than fact. Almost all full-time workers (99.4%) are earning more than the minimum wage, and almost all full-time hourly workers (98.3%) are earning more than the minimum wage. Most importantly, the fact that more than three out of four teenagers (77.2%), who are the least skilled and least educated group of workers, earned more than the minimum wage in 2011 would suggest the minimum wage is mostly an entry-level wage for beginning workers with no skills. The reality of the labor market is that even a large majority of previously unskilled teenage workers are earning more than the minimum wage as soon as they acquire minimal jobs skills and work habits, and can demonstrate their value to employers.

If more than three-quarters of teenagers earn more than the minimum wage, then any hardworking adult certainly can, and it must be a false narrative that full-time workers “are stuck” in minimum wage jobs and trying to raise a family, but mired in a life of poverty.

Acton’s Anthony Bradley also explains why “if you were a minority or teenager raising the minimum wage to $9 per hour is not what you wanted to hear”:

Americans need to ask themselves a serious question: how does raising the minimum wage encourage business owners to take risks on unskilled labor? In fact, the minimum wage was never seen as a basis for socio-economic mobility. That is, government set wages were intended to be a temporary safety net, not a way of life. If the President wants to make the minimum wage a moral issue by saying that it’s “wrong” for the minimum wage not to sustain a family of four why, then, is it not also “wrong” to put business owners in a position where they will need to lay-off employees, reduce hours, and not take risks to hire unskilled workers, and so on, in order to fund the arbitrary wage increase?

Joe Carter

Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).