Proposed Minimum Wage Increase Is Flawed

EXPERT COMMENTARY

Proposed Minimum Wage Increase Is Flawed

By Keith Hall |
Feb 13, 2013

President Obama in his State of the Union Address last night proposed raising the federal minimum wage from $7.25 to $9.00 an hour to raise the incomes of millions of working families.

Mercatus Center senior research fellow Keith Hall – former Commissioner at the Bureau of Labor Statistics – says there are two critical flaws with the president’s minimum wage plan: 

1.       There are not millions of working families making the minimum wage. In fact, about 1.7 million people currently earn the federal minimum wage – this is 0.7 percent of the working-aged population. Over half of these people are under the age of 25 and nearly a third are teenagers.

2.       Raising the minimum wage may reduce low-skilled employment, employer job training, and worker benefits. That would have a particularly negative impact during this historically slow economic recovery, not to mention the fact that only 46 percent of the population under 25 years old are currently employed.”

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