Democrats on Capitol Hill are agitating to increase the federal minimum wage from $7.25/hour to $10.10/hour. Why? To decrease "income inequality." And if that's not good enough reason for the 39.3% increase, the Democrats argue, consider following four facts:
- Today, the federal minimum wage would be $10.60/hour if it were at the same level as in 1968.
- The minimum wage has dropped to 37% of the average hourly wage of nonsupervisory production workers. That's down from 46% in 1979 and 53% in 1968.
- Due to the Earned Income Tax Credit, minimum wage workers in 1968 paid higher taxes than minimum wage workers pay today.
- Low-wage workers are better educated today than in past times. In fact, the number of low-wage workers who have attended college rose from 25% to 43% between 1979 and 2011.
Unfortunately, those facts provide powerful and effective soundbites that the sheeple remember because they've heard it so often.
Thanks to an analysis of the data by Scott Winship, the fact is that those alleged facts are problematic.
Take the first fact. The calculation the Democrats are using includes a cost-of-living adjustment that overstates inflation. The adjustment skews the data so much that the Congressional Budget Office, the Bureau of Labor Statistics, and the Census Bureau won't use those data.
The second fact fails to account for another fact: The number of minimum wage workers has decreased. In 2011, only 3% of workers made the minimum wage in 2011, compared in 1979 to 8%.
The third fact neglects the most inconvenient fact: Today, despite the Earned Income Tax Credit, most of the workforce--70%--is subject to state minimum wages that exceed the federal minimum wage. As a result, they pay higher taxes today than they have historically...thanks to those Democrats who are pushing for a higher federal minimum wage today.
And, lastly, the fourth fact. It isn't just low-wage workers who have increasingly attended college. The percentage of all workers attending college rose from 33% to 59% between 1979 and 2011.
The evidence the Democrats on Capitol Hill have put forward in favor of an increase to the minimum wage is not only inconsistent, but it also relies on weak (or more likely, inaccurate) evidence. Insofar as The Motley Monk is concerned, the Democrats should just be honest: Raising the federal minimum wage is all about getting their sheeple's votes and has very little to do with economic reality.
Let the discussion begin...
To read Scott Winship's analysis, click on the following link:
"How Solid is the Case for Raising the Minimum Wage?"