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LETTERS
February 22, 2013, 4:42 p.m. ET
Minimum-Wage Hike Will Help Some but
Hurt Others
Regarding your editorial "The Minority Youth Unemployment Act" (Feb. 16): It was
pure political theater and pandering for President Obama to throw the minimum wage
into his State of the Union address. The topic is just another diversion from the serious
business of creating jobs, reducing debt, reforming the tax system and tackling Medicare.
The work of economist David Neumark reveals that a 10% increase in the minimum
wage will decrease employment of minority teenagers receiving the minimum wage by
6.6%. However, few families, few full-time workers and few minority young adults are
impacted.
According to the March 2, 2012 report of the Bureau of Labor Statistics on the
characteristics of minimum-wage workers (MWWs) there are only 3.83 million hourly
workers (from a total of 73.9 million hourly workers) who are paid at the minimum wage
or less. About 43.2% work in food service where tips are excluded in the minimum-wage
status determination. The number of MWWs who are full-time workers with families is
less than 1.4 million.
Minorities account for 14.61 million hourly workers and 823,000 of the MWWs. It is
estimated that fewer than 250,000 of the 823,000 minorities are teens. So if a 24% rise in
the minimum wage is instituted, a 16% decrease in minority teen employment will occur
and a 9.4% decrease in total minority employment will occur. This will decrease minority
teen income by $450 million and all minority income by $860 million. However, the total
MWWs who don't lose their jobs will have a total increased income of $9.4 billion.
Ron Dudley
Sanibel, Fla.
Missing from this discussion is the "wage push" that must occur when the lowest wage
earners receive a government-mandated 24% pay increase. Why shouldn't full-time
employees who are being paid $10 to $15 an hour expect a similar wage adjustment?
This increase in labor cost will further curtail additional hiring. Additionally, my business
routinely employs seasonal employees (mostly high-school and college-age kids) at wage
rates well above the minimum wage because we strive to achieve exactly what President
Obama stated he wants to attain by increasing the minimum wage—a stable workforce
with increased productivity. It is terrific news that the government now needs to dictate
this basic principle to business owners.
Peter Edwards
President
Zeb's General Store, Inc.
North Conway, N.H.
Michael Saltsman's "The $9 Minimum Wage That Already Exists" (op-ed, Feb. 14) about
the minimum-wage proposal by President Obama and the Earned Income Tax Credit
(EITC) is fundamentally flawed. Perversely, the EITC subsidizes companies (and
government institutions) which underpay employees. The current system revolving
around the ETIC isn't based on market forces and promotes a tax structure through which
taxpayers in effect subsidize companies and governments (especially local and state) that
are unwilling to pay employees a living wage. Too much attention by far is paid to
business interests and not nearly enough to people. Paying less than a living wage means
that more will be spent on food stamps, health-care subsidies and other transfer
payments. A cruel irony indeed.
Michael Stout
Columbia, S.C.
A more productive solution to raising employment and earnings would be to cut the
minimum wage for teenagers to about $2 an hour. Then it would be worthwhile for an
employer to take an ignorant and unskilled youngster of uncertain reliability and train
him or her. Eventually, that person may become an employee worth the $7.25 an hour or
more.
Hank Landa
Wauwatosa, Wis.
A version of this article appeared February 23, 2013, on page A12 in the U.S. edition of
The Wall Street Journal, with the headline: Minimum-Wage Hike Will Help Some but
Hurt Others.
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