Lower Minimum Wage Creates Opportunities

Posted on March 12, 2010

Arizona’s unemployment rate remains at a high 9.2 percent, and the state’s lawmakers should be commended for focusing on the creation of more entry-level jobs. Kudos to Inside Tucson Business for also recognizing the need to address high minimum wage rates for entry-level workers (“Lowering teen minimum wage could help,” editorial in March 8 issue).

Decades of economic research demonstrate that a high minimum-wage environment leads to fewer job opportunities for less-experienced workers. Most recently, research out of Ball State University found that the 40 percent federal wage hike between July 2007 and July 2009 was responsible for 550,000 fewer part-time jobs.

Department of Education data show that 27 million Americans lack the skills needed to fill out a job application. Yet even the most basic restaurant or retail jobs require an ability to read and do basic math. A lower “training” wage makes it easier for employers to hire these less-experienced workers, giving them a chance to acquire the skills needed to move up in the workforce.

For these Arizonans, starting at a lower wage is better than no wage at all.

Michael Saltsman, Research Fellow, Employment Policies Institute, Washington, D.C.