A Higher Minimum Wage—Helpful or Harmful?

by: Dr. Lynn Reaser Image

President Obama in his State of the Union address this week proposed raising the federal minimum wage to $9.00 an hour.  Would this be a positive step that Congress should endorse?

The answer is “no”.  The proposed 28% jump in the federal minimum wage is more than four times the 7% increase in consumer prices that has occurred since 2009 when the current $7.25 minimum was set.  A 12.5% rise from the $8.00 current minimum wage in California and San Diego would also impose a hardship on many employers already struggling with the prospect of higher health care costs.

Many individuals earning a minimum wage have limited education, skills, or experience as they try to find a rung on the jobs ladder.  Many of these workers are students or part-time workers.  Others are retired people, seeking to supplement their incomes.

The minimum wage hike could make the workers too expensive for many employers, causing them to either pare back future hiring or to cut current payroll levels.  As a result, the individuals the proposal aims to help could end up being hurtful for most.

(Image Credit: US Department of Labor) Google Images. Digital image. Google Images. U.S.Department of Labor, n.d. Web. 14 Feb. 2013.


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