Wrong time for minimum wage hike
Supporters of raising minimum wage, despite good intentions, do not end up helping the ones who need it the most. An example would be a single mother of one child faces a marginal tax rate of 91 percent when her pay rises from the current federal rate of $7.25 to $10.10 per hour. Studies prove that higher minimum wages do not reduce poverty rates. Congress could do more by restructuring welfare programs and their associated phase out rates.
Congress instituted the minimum wage in 1938 as part of the Fair Labor Standards Act. Congress typically raises the minimum wage only during times of healthy economic growth and low unemployment. According to the Department of Labor Bureau of Labor Statistics, Congress has not raised the minimum wage when unemployment stood above 5.4 percent. When wages rise in a bad economy, employers hire fewer workers. A 10 percent increase in labor costs causes employers to cut their workforce by 3 percent. Higher compensation without increases in productivity causes employers to hire fewer workers.
Many supporters of raising the minimum wage argue it will help low-income single parents surviving on it as their only source of income. Minimum wage workers, however, do not fit this stereotype. Just 4 percent of minimum wage workers are single parents working full time. Most minimum wage jobs are entry level positions filled by workers with limited education and experience. Minimum wage jobs give these workers experience and teach them essential job skills. Some skills are unique to an individual job, more often they pertain to general employability. The discipline of waking up and getting to work on time, learning how to interact with customers and co-workers, how to accept direction from a boss. These skills are essential to get ahead in the workplace, but difficult to learn without actual on the job experience.