Sen. Kerry vs. Nobel Prize Economists
Publication Date: June 2004
Topics: Minimum Wage
Washington – While John Kerry calls for a 36% increase in the minimum wage, the majority of economic research, including the statements of five Nobel Prize-winning economists, continue to show that raising the minimum wage is a dangerous political ploy that will only serve to make life harder for the nation’s least skilled employees.
“Leading economists such as Federal Reserve Chairman Alan Greenspan and Nobel Prize-winning economist Milton Friedman are honest brokers of information who realize that a minimum wage will have the unintended consequence of hurting the least skilled employees in America. It is unfortunate and unconscionable that Sen. Kerry would seek to gain political advantage despite the decades of research and scores of economic studies highlighting the damage caused by these wage increases,” said Richard Berman, executive director of the Employment Policies Institute.
This research dates back to Franklin Roosevelt’s own Secretary of Labor, Frances Perkins, whose researchers found that following the creation of the first minimum wage, low-skill employees lost their jobs to higher skilled and more experienced applicants attracted to the new wage. More recent research from Cornell University shows that groups such as high school dropouts and African-American young adults suffer four times more employment loss from a minimum wage hike than all other employees.
“These lost job opportunities for low-skill employees are the real results from a minimum wage hike,” said Berman. “Rather than help those who most need assistance, Sen. Kerry’s minimum wage hike will push low-skill family heads out of the labor market and deeper into poverty.”
According to U.S. Census data, only 15% of the beneficiaries from Kerry’s proposed increase are single earners with children. The remaining 85% are teenagers living with their working parents, adults living alone, or they are married with a working spouse. As a result, the average income of these beneficiaries is over $44,000 a year. Concurring, former Clinton Labor Secretary Robert Reich has acknowledged, “after all most minimum wage workers aren’t poor.”