While congressional Democrats want employers to adhere to a proposed increase in the federal minimum wage, a new analysis shows most bill sponsors are not so generous with some of their own workers.
The Employment Policies Institute found that 96 percent of House and Senate sponsors of the minimum wage bill do not pay their interns. That includes lead bill sponsors, like Sen. Tom Harkin, D-Iowa, according to the study.
As a whole, most members of Congress — whether they support an increased minimum wage or not — do not pay interns. But the Employment Policies Institute argues that the practice shows “sponsors are legislating with a ‘do as I say, not as I do’ approach.”
Speaking of the minimum wage policy, JLF’s Roy Cordato has written extensively about the economics of the minimum wage and its impacts, including this post from early last year.
Empirical estimations by two Duke University economists suggests that for each increase of 10 percent in the minimum wage there will be a 2.9 percent decrease in the likelihood that a low skilled worker will find employment.[i] When one factors in health insurance costs mandated by Obamacare a $9 minimum wage would probably translate into a 50 percent increase in the cost of hiring a minimum wage employee. This tradeoff implies nearly a 15 percent decline in the chances that a low skilled worker will find employment.
President Obama and other advocates of ever increasing minimum wage mandates act as if there is no relationship between productivity of the worker and wages paid. By assuming that increasingly higher minimum wages will cause no one to be unemployed, they must also be assuming that there is no one in the labor force whose skills are so low that they cannot command the higher wage and cost of employment. The other assumption, which I do not rule out, is that they understand these simple economic relationships quite well and either don’t care about the consequences or, because of other unstated motives, welcome them.
So tomorrow evening, when the president again pushes the idea of raising the minimum wage in a State of the Union speech that apparently will be steeped in the usual class warfare, remember the economics of the policy.
