Between a Rock and a Hard Place
Everybody loses from minimum wage increases like the one just passed in Missouri. David Nicklaus comments on the effects of Arizona’s law:
The Arizona Republic reports that some employers “say payroll budgets have risen so much that they’re cutting hours, instituting hiring freezes and laying off employees.”
Teen-agers often are the ones who feel the effects.
Arizona’s minimum wage went from $5.15 an hour to $6.75 last month. Missouri’s went from $5.15 to $6.50. I wonder how many teen-agers here are getting the same kind of bad news?
Nicklaus is right that minimum wages hurt teenagers, but the bad effects don’t stop there. First, an employer who has to layoff someone is probably going to let go of a poor single mother with few skills, rather than a better-educated teenager from a middle-income family (as many minimum wage earners are).
Second, minimum wages hurt the people who get to keep their jobs, too. Minimum wages keep people from getting the training they need to move up on the career ladder. And minimum wage increases can lead workers to expect larger and larger raises. When these workers start earning more than the minimum wage, they’ll be poor bargainers because their expectations are unrealistic.