Saturday, April 25, 2015

Why Raising the Minimum Wage Will Make the Path to Higher Wages More Difficult, Not Easier, for Young, Less-Educated and Inexperienced Workers

Mark Perry explains:

The Bureau of Labor Statistics just released its annual report on the “Characteristics of Minimum Wage Workers, 2014,” and here are some highlights:

Age. For workers ages 16 to 19 years old, only 15.3% made the minimum wage or less in 2014 (about 1 in every 6.5 workers in that age group) and almost 85% of those workers earned more than the federal minimum wage last year. For workers ages 25 and older, only 2.5% (1 in 40) earned the federal minimum wage or less last year. So even the vast majority of teenagers (more than 8 of every 10) earn more than then federal minimum wage.

Education. For workers with less than a high school diploma, 7.3% of those workers earned the minimum wage last year, compared to 3.5% (1 in 29) of high school graduates, 2.2% (1 in 45) of workers with an associate’s degree and fewer than 2% of workers (about 1 in 53) with a bachelor’s degree or higher who earned the minimum wage last year.

Marital Status. For never married workers, who tend to also be young, 6.7% of that cohort worked last year at the minimum wage, compared to only 1.9% (about 1 in 53) of married workers with a spouse present who worked at the minimum wage in 2014.

Hours Worked. Among full-time workers only 1.8% (1 in 56) earned the minimum wage or less, compared to 9.5% (1 in 11) of part-time workers.

Bottom Line: Four important factors that will help workers earn a wage above the federal minimum wage are: 1) age (experience), 2) education, 3) marital status and 4) hours worked. Only 1-in-40 workers age 25 and above make the minimum wage, only 1-in-45 workers with an associate’s degree or higher makes the minimum wage, only 1-in-53 married workers earns the minimum wage, and only 1-in-56 workers working full-time earns the minimum wage. The evidence seems clear that the minimum wage applies only to a very small group of young, inexperienced, single, part-time workers, with a lack of education. The path to higher wages includes staying in school, getting job experience, working full-time and getting married. Raising the minimum wage will make that path to higher wages more difficult, not easier, because it will price many younger, less-educated, less experienced workers out of the labor market — and will deny them the opportunity to work, gain experience, and gain the job skills they need that paves the path to higher wages.


  1. If you raise the minimum wage (meaning - you outlaw anyone being employed at a lower wage) - you effectively eliminate "entry level jobs" - and the only people who can get hired are people with prior work experienced.

    Throughout America's post WWII history, low--paying jobs were "entry level jobs" for young workers - effectively becoming paid interns, to learn about working in an organization, starting at the bottom. These jobs were NEVER meant to be careers - they were meant to be stepping stones, toward a sequence of better jobs.

    It is only after Democratic propaganda began permeating the social atmosphere that "entry level jobs" became "primary career employment for permanent unskilled laborers".

    But - it is worse than that. It is outlawing employment of millions of inexperienced and unskilled workers - who simply are not qualified to take on low-middle level jobs, without any prior entry-level experience.

    Imposing a minimum wage is like requiring universities to enroll freshmen into college-level courses, even though the students were 12 year olds, who had just completed sixth grade. Most students cannot do well in university-level first-year courses without having been prepared by high school, courses. It is idiotic to impose an arbitrary "minimum access to university" at matriculation from sixth grade. That is exactly what minimum wage does - it requires "leap frogging" from unemployment to seasoned employee status.

    That will not happen. So minimum wage will simply kill off job opportunities.

    Anyone in a $5 per hour job should be focusing upon improving himself or herself to move to a better-paying job - and not focusing upon making life-long career out of that entry level job, by demanding that they pay rate be jacked up to a career-level salary.

    First year minor-league baseball players work to show their skills, and thereby move up to the major leagues. They don't 'homestead" in their first-ever minor league job - and expect their employer to raise their salary to major-league level, and wait 20 years to elevate a newcomer to that inflated position.

  2. Despite a flurry of government statistics, Perry offers no evidence that his four factors are anything more than coincidental. Since when is getting an education the same as staying in school? The only factor he lists that makes any sense is hours worked. And while greater hours worked may help you exceed the minimum wage if its government work it s destroying wealth not creating it. Mandating a minimum wage is outlawing work and that is enough reason to eliminate it.