State legislative leaders unveiled “The Women’s Economic Security Act” last week. It includes some old retreads from previous sessions, including the minimum wage hike that stalled in 2013. At the close of last year’s session, the Minnesota House and Senate passed bills to hike the minimum wage to $9.50 and $7.75 respectively, but the two bills were never reconciled in conference. As the 2014 session approaches, Governor Dayton, liberal legislators, and labor unions are clearly aiming high. Dayton has indicated that he would like to raise the wage to $9.50 or higher, and index it to inflation to provide automatic annual increases.
And this time around, liberal advocates have recast the minimum wage as a “gender issue” to give it more political potency. That may be good PR, but government-mandated wage hikes remain bad policy and bad economics.
Here are a few inconvenient facts you won’t hear from proponents:
* Minimum wage hikes cost jobs, and Minnesota will be no exception
* Rising labor costs are accelerating the replacement of low-wage labor with automation, particularly in the service sector
* Employment losses resulting from minimum wage hikes fall disproportionately on young, less educated workers
* While labor unions and progressive activists have framed this as a fight between low-wage workers and big corporations, about 40 percent of the minimum wage workforce is employed by small businesses with fewer than 50 employees
* 16 to 24 year olds make up just 19.5 percent of America’s hourly workforce, but account for half (49.5 percent) of all workers at or below the federal minimum wage.* Liberal talking points rarely acknowledge the expansion, or even the existence, of the earned income tax credit and other government programs that raise most minimum wage earners’ real income
For more facts on the minimum wage, check out the Freedom Foundation’s analysis from last year as well as the Cato Institute’s collection of minimum wage fact sheets, studies, and commentaries.