Raising the Minimum Wage Hurts the Poor

EXPERT COMMENTARY

Raising the Minimum Wage Hurts the Poor

By Mark Adams |
Mar 11, 2013

When they respond to the president's plea to help hardworking Americans by raising the minimum wage, Congress should follow the president's intent and not his policy. Government regulations, including the minimum wage, do little to help the poor. If Congress and the president want to help the poor, they should start by eliminating regulations that redistribute away from the poorest families.

The minimum wage is more likely to hurt the people it is supposed to help by making it harder for them to find jobs.

Minimum wage workers tend be young and unskilled. Less than half of workers under the age of 25 are currently employed and many rely on low paying opportunities to get their first break. The majority will earn a raise within a year, but they currently lack the experience and skill to compete for higher paying jobs. Raising the minimum wage makes it harder for these inexperienced workers to find a job, because businesses will either eliminate positions or choose to hire someone with more experience at the higher mandated wage. Minimum wage jobs could also be a pathway to retraining for workers facing a mismatch between their skills and available openings. A higher minimum wage would limit such opportunities, and that's particularly dangerous during this historically slow recovery

If policymakers really want to help the poor, they should seek to reduce the barriers to job creation, instead of adding to them by hiking minimum wage. Job creators are already tangled in a forest of red tape: over 170,000 pages of regulations from the federal government alone. Complying with these regulations is disproportionately burdensome for the small businesses that create the majority of new jobs.

The cost of regulation is not limited to business. Perversely, this burden falls disproportionately on low-income families through lower wages and higher prices to consumers.

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