The Minimum Wage's Dirty Little Secret; D. Laband

TREmEEMAN IDEASON LIBERTY The Minimum Wage's DirtyLittleSecret by David N. Laband T he current Administration and their pals in the Congress only too obviously think that boosting the minimumwage by 90 cents per hour over the next two years is good politics (ifbad economics). They are demon strably wrong. This battle plan for "help ing" lower-income Americans in the class warfare that dominates a partisan retro 1960s mindset is in reality a blueprint for failure and worse. The inevitable results of an increase in the minimum wage will be to further disadvantage the least-skilled, low est-paid workers in America and increase employment and earnings among the most skilled, well-paid workers. Let's start with the obvious: an increase in the minimum wage is not going to directly help many of the least-skilled workers. Only 4 percent of hourly workers in America currently earn minimum wage. These indi viduals bring few, if any, skills to the work place; they acquire job skills via on-the-job training provided by their employers. In the face of a 21 percent increase in their unit labor cost, some employers of unskilled labor will react by unhiring these individu als. No doubt, the individuals who do not get fired will appreciate the political effort as their nominal wages will increase. How ever, the unfortunate ones who end up in the David Laband is Professor of Economics at Auburn University in Auburn, Alabama.