by Mitch Kokai
Senior Political Analyst, John Locke Foundation
John Fund devotes his latest National Review Online column to debunking myths about government-mandated minimum wages.
Even some Democrats are raising questions about the wisdom of hiking the minimum wage when 83 percent of minimum-wage workers are teenagers or adults earning a second income, not heads of households. Labor Department data show a mere 4 percent of minimum-wage workers are single parents working full-time, compared with 5.6 percent of all U.S. workers. A higher minimum wage would price some marginal workers out of the job market, leading to more unemployment.
This week, Christina Romer, who chaired Obama’s Council of Economic Advisers from 2009 to 2010 and now teaches at the University of California, Berkeley, threw some cold water on the president’s proposal. She wrote in a New York Times op-ed that “robust competition is a powerful force helping to ensure that workers are paid” decent wages. A wage hike “may not be particularly well-targeted as an anti-poverty proposal” and could “harm the very people whom a minimum wage is supposed to help.” Noting that raising the minimum wage to $9 an hour would result in only about $20 billion in extra consumer spending — a pittance in a $15 trillion economy — she observed that “most economists prefer other ways to help low-income families,” and that “a job may ultimately be the most valuable thing for a family struggling to escape poverty.”