Tennessee: Minimum wage hurts hiring, traps workers
According to The Tennessean:
Effective today, the federal minimum wage will increase from $5.85 per hour to $6.55 per hour. In one year, this rate will increase to $7.25 per hour.
The impact will be minimal to many employers and employees, though some costs will be passed along to consumers.
Most Tennesseans understand hiring at or near the minimum wage in this labor market is virtually impossible. Reporters have a difficult time identifying employers who pay the minimum wage. Few constituents are calling elected officials about the issue.
So why does the minimum wage receive so much media and political attention? Some politicians say the minimum wage must be updated to help workers who need help. Others cite public opinion surveys as reason for action. A few proponents use the minimum wage as political ammunition.
Facts about the minimum wage are telling. The few who earn the minimum are often apprentices, teens and entry-level workers, whose compensation is proportional to the job performed. They know, as the Department of Labor says, nearly seven in 10 minimum-wage earners earn a higher wage within one year.
Mandated minimum wages can have a negative impact on employment among lower-skilled workers. According to the National Bureau of Economic Research, municipalities that passed such laws experienced an average 1.7 percentage point increase in unemployment and up to a 3.5 percentage point increase two to three years after enactment.
Mandatory wage drives inflation
Basic economics also paint a different picture than proponents would argue: Increasing the minimum wage is inflationary; increasing the cost of hiring does not encourage businesses to create more jobs; minimum-wage hikes are inefficient tools to erase poverty and discourage business owners from hiring the very people who need to learn job skills; and in the current labor market, paying minimum wage is not even an option for most employers. It is, in effect, a bidding war among employers for available workers....click to continue.
