What ACORN Won't Tell You About Government Mandated Wage Increases

Forcing an increase in the minimum wage sounds like a good idea. Supporters claim that increasing the minimum wage will help working families make ends meet. But decades of research are clear: mandated wage hikes impose high economic costs. Worse, they also impose high social costs, hurting most those they are intended to help.

With an increase in entry-level labor costs, many employers will shorten the shifts of many existing employees. Other employers will eliminate positions entirely. The least-skilled will be particularly harmed, as they will have a harder time finding — or keeping — that critical entry-level job.

Low-skilled employees will be pushed out of jobs as higher wages attract applicants with more skills and more experience. In 2004, Duke University researchers found that low-skilled adult employees are often displaced by teens from wealthy families who are attracted by the higher wage.

The vast majority of minimum wage earners are teens living at home or are second-wage earners from financially stable families. Nationally, only 15% of employees that would be affected by a minimum wage increase are single earners with a family. The average family income of employees who would be affected by this minimum wage increase is just over $44,000.

A minimum wage job is the first step to higher wages. The skills and experience acquired help employees move up the economic ladder. Research shows that almost two-thirds of those earning minimum wage receive a raise within one to twelve months of being hired.

A minimum wage is a starting wage, not a life or career wage. Employees gain critical skills and experience that help them advance to higher pay. Raising the minimum wage reduces the availability of these starting jobs. It pushes these first jobs further out of reach of low-skill employees.