Effects of the Minimum Wage: We Told You So!

There’s an old saying that I’m sure you’ve all heard: be careful what you wish for, you may get it. Teenagers in Arizona are learning that the hard way thanks to their recently-enacted minimum wage hike. Bombarded with the same emotional garbage you and I were hit with this fall over how nobody can ever support themselves or their families on (whatever the current rate was) an hour, voters with the best of intentions passed similar raises in states across the country. Now, not even two months after many of these initiatives went in to effect, workers in these states are suffering from a case of unintended consequences.

Libertarians and conservatives threw everything they could at these initiatives- objective information, logic, charts, and the basic knowledge you learn in Economics 100 courses- but they were ignored by voters and labeled as heartless and unsympathetic to the needs of the poor. Never mind that the vast majority of those on minimum wage are young and work part-time, rather than the struggling single mom with several kids trotted out in the commercials: a whopping two percent of the American workforce above the age of 25 makes the minimum wage, and all of 4.1% of those on minimum wage are single parents. I’m sure most of you reading this have completely forgotten what they teach you in the very first economics course you ever take, assuming you took it at all. Raising the minimum wage makes hiring more people more expensive and thus, more difficult to do, especially for those small businesses liberals love to talk to us about in contrast with the evil corporations. With this in mind, businesses are forced to hire the best workers they can for even the most basic of tasks, since they can’t afford to take risks on the uneducated and inexperienced. I shouldn’t have to explain that if it’s more difficult for you to get hired, it’s more difficult for you to get a job, but even this basic tautology is lost on the political left.

Consider what is currently happening in Arizona. The good people, while feeling warm and fuzzy inside because they think they’ve helped the poor, are now witnessing the havoc they’ve wrought, often while searching for jobs themselves. The recent hike has caused some employers to cut hours, institute hiring freezes, and lay off employees because they simply can’t afford to do otherwise. And guess who the first to get the pink slips were! Businesses, especially in the food industry, are being forced to take fewer and fewer chances on workers with little education or experience, effectively pricing them out of the labor market. For those on the left, that typically means you and me. On the other side of the coin, those who were fortunate enough to keep working were enjoying the benefits of slightly more money. Yes, raising the minimum wage is great . . . if you can keep your job.

While those suffering the consequences of the minimum wage hike would appear to be clear enough, those reaping the benefits are not. Some of the most ardent supporters of the new hike (besides elected officeholders desperate to find some issue that could beat the Republicans) were union members. This would seem ironic since their wages are typically well above the minimum wage. In fact, they’re often contractually tied to the minimum wage, guaranteeing them a certain percentage above the mandated rate. That’s right, the one’s who are really profiting off the short-sightedness of American voters are not the poor, the downtrodden, or the single moms, they’re economically comfortable unionized workers who don’t give a damn about the poor, the downtrodden, or the single moms. All I can say is “we told you so.”