Minimum wage hike could cost poor jobs

Posted on December 16, 2008

Employers are already resisting “the impulse to lay off workers in the face of the current turmoil” (“A deepening crisis,” editorial, Dec. 8), but additional challenges remain ahead.

President-elect Barack Obama has promised to raise the federal minimum wage from $7.25 to $9.50, which means that many Maryland small businesses will have to make the difficult decision to let some employees go.

According to research conducted by an economist at the University of California at Irvine, minimum-wage hikes clearly reduce the employment of those with the fewest skills.

These negative effects are concentrated among the most vulnerable employees.
The study estimates that for every 10 percent minimum wage hike, employment for young black adults and teenagers falls 8.5 percent.

You don’t have to be an economist to see the fallacy of a mandated wage increase: In a recession, a job at the previous minimum wage is much better than no job at a higher rate.

Tim Miller, Washington

The writer is communications director of the Employment Policies Institute.