Tweet debunk: Department of Labor minimum wage push ignores job loss and temporary nature of minimum wage pay
Link to tweet. If you are an employer or are in charge of human resources for your organization, you might soon be on the receiving end of the U.S. Department of Labor’s social media campaign to increase the minimum wage. Unlike the job-creators in the economy, federal bureaucrats don’t seem to fully-grasp how employers determine...
Link to tweet.
If you are an employer or are in charge of human resources for your organization, you might soon be on the receiving end of the U.S. Department of Labor’s social media campaign to increase the minimum wage. Unlike the job-creators in the economy, federal bureaucrats don’t seem to fully-grasp how employers determine wages.
The Department of Labor has launched a social media campaign to push employers into supporting a higher minimum wage. The online push includes a video of sympathetic workers talking about the struggles they face as low-wage workers.
After watching the video, one might mistakenly believe that employers determine pay in a vacuum and that the employer-employee relationship is a one-way street. The reality is that, for many of the workers earning wages at the lower-rungs of the economic ladder, they are learning valuable skills that provide the foundation for future advancement in the workforce.
Employers invest time and resources into their employees and, if those employees are not being adequately rewarded for those efforts, employees are free to seek employment elsewhere. In many cases, that would be working for competitors – at a higher wage.
There is no doubt that the plights of low-wage workers are important to understand and address. But the campaign not only implies that a person earning a minimum wage is forever relegated to that wage and fails to mention the public support safety net in already in place for low-wage workers, but it also fails to mention the government’s own reports showing how a minimum wage undermines job prospects and destroys jobs in the lowest-wage sectors.
Of those workers making the minimum wage today, two-thirds will be earning a higher wage one year from now. Most workers, once they learn the job and demonstrate a level of competence, will earn more as the value of their labor increases to their current employer or a competing one.
Mandating that employers pay more not only dampens future job growth, it also throws the lowest-skilled workers into the ranks of the unemployed or shuts them out of the labor market altogether. In fact, a recent government report estimates that 500,000 to up to 1 million could be thrown into the ranks of the unemployed as a direct result of increasing the minimum wage.
The government’s logic is half-baked. Paying a worker more per hour will increase his income; but paying some workers more per hour will mean that other workers will lose their jobs or won’t be able to enter the workforce at all. By ignoring the labor market prospects for the least-skilled workers, those pushing for a minimum wage hike are trading the higher incomes of some for the unemployment of others. Those newly unemployed, as those who are shut out of a job altogether, are worse off as a direct result.
It is this group – the workers who have the most limited job prospects and to whom this policy will cause the most harm – that a minimum wage hike is intended to help.