As a person with a well grounded understanding of economics, it concerns me to read an economic story which is intentionally misleading or harmful to the future of our country. I believe this happens because much of the media is not well schooled in economics which makes them victims of politicians who foist erroneous liberal ideas. A perfect example is the local positive media coverage of the mandatory hike in the Arizona minimum wage. Superficially, politicians see this as a quick method to get votes of the young and the ignorant. However, with just five minutes of research, any journalist can find reams of evidence that hiking the minimum wage does severe damage to the same people the politicians pretend to help.
I recall one of the first actions of the newly elected Pelosi/Reid Congress in early 2007. They bragged about how their actions to raise the national minimum wage will help Americans secure a “living wage”, while others were trying to deny workers their “rights” to higher pay. The actual result? The unemployment rate among minority, uneducated, and young workers are now at record highs, with no end in sight. The new Congress intentionally ignored all the research on their desks which proved they were harming their own voters.
For example: From the Joint Economic Committee, US Congress 1996: “The voices clamoring for a minimum wage hike are getting ever louder. Proponents argue that the current wage level does not provide an adequate incentive for work. Also, they argue that an increase in the minimum wage will have only a very minor impact on jobs. These arguments are not grounded in fact. The impact of raising the minimum wage has been studied since its inception. All credible research has come to the same conclusion: raising the minimum wage hurts the poor. It takes away jobs, keeps people on welfare, and encourages high-school students to drop out. Policy makers should be clear on the consequence of higher minimum wages.
It is a political measure that plays to a misunderstanding of the impact of higher minimum wages. The future of the American economy depends on a correct understanding of the causes of prosperity. For too long, attempts to relieve poverty have been misguided. Raising the minimum wage is a wrong-headed solution that will deprive young, poor Americans of an opportunity to improve their economic situation.” This above Congressional report was from sources including the American Economic Review, National Bureau of Economic Research: Cambridge, MA, 1995.
For something even more recent and more local, this is from ASU, 2009: “[My students are] always surprised when I tell them that the minimum wage hurts them,” says Boyes, a W. P. Carey professor of economics who explores the minimum wage in class. “They always say something like, ‘Oh thank God for the minimum wage — I just wish it was $20-anhour so I could get more money.’ And I have to tell them, ‘No, if it was $20-an-hour, you wouldn’t have more money. Because you wouldn’t have a job.'”
Economists rarely agree on anything, Boyes said, but when it comes to the federal minimum wage, there is near-unanimous agreement that these wage floors stunt growth, hamper businesses’ ability to compete and, maybe most importantly, make it more difficult for low-wage, lows killed workers (most especially teenagers) to find entry-level jobs. Yet despite the fact that nearly all the evidence suggests that it is a drag on the economy and a burden on American workers, the minimum wage has survived in this country (and many other Western nations) for decades. The reason is simple, says Boyes: Politics.” Once again, if journalists genuinely worked to keep our politicians more honest, we’d all be better off.