Yesterday Mitt Romney, in an interview with CNN, said “I’m not concerned about the very poor. We have a safety net there. If it needs repair, I’ll fix it.” Well, today he set about proving that he meant it. In a statement to reporters on his campaign plane he said that he favored automatic increases in the minimum wage that are tied to inflation. The fact is that there are very few propositions that are more widely supported by economists than the idea that increases in the minimum wage hurt the least skilled and least well off among us.

In deciding to hire anyone, an employer must answer a fundamental question, will the value of what that worker can be expected to produce be greater than the cost of hiring him or her? In other words, will that employee be profitable to the employer? From a pure business perspective, this is the only way any new hire can be justified. Because of this, minimum wage laws price certain people out of the labor market. With mandated employer taxes such as those required for  Social Security and Medicare, at the current minimum wage of $7.25 per hour it costs a potential employer well over $8.00 per hour to hire a new person. And with health insurance mandates on the horizon that cost will go much higher. What this means is that everyone whose skills are so low that they cannot produce benefits to the employer that more than offsets these costs will be unable to find work. This will not, of course, affect professionals like lawyers, accountants, engineers or even skilled manual laborers such as electricians and plumbers. It will instead hurt those in society who have little education and little or no job experience, i.e., teenagers, high school dropouts, etc. The unemployment rate for African Americans between 18 and 24, those most likely to be in this low skilled demographic,  has been around  30 percent. These are the people that economists tend to agree would be the most hurt by the minimum wage, i.e. the people that Romney refers to as the “very poor” and wants to relegate to the safety net. If Romney carries through with this as president, caught in the safety net is exactly where they’ll be.