by Cody Ewers
A few days ago, a 19-year-old Dairy Queen
manager refused service to a woman who picked up $20 a visually impaired
customer in front of her had unknowingly dropped. Joey Prusak noticed
this woman quickly pick it up and put it in her purse. When she
approached the counter, Prusak told her to return the money or he
wouldn’t serve her. After she refused, Prusak took a Jackson from his
own billfold and handed it to the victimized customer.
Prusak
started at the Dairy Queen counter when he was 14, worked his way up
and is now running the show as manager. He says he is saving up to go to
school for business management.
He is a
shining example of the segment of America’s workforce hit the hardest as
our economy limps on through years of bad economic policy.
Unfortunately for the rest of the youth and business owners like me,
community leaders and lawmakers are supporting yet another economic
Band-Aid that will tighten a competitive minimum-wage job market. They
want to raise the federal minimum wage.
Supporters
of raising the minimum wage, including Ann Arbor businessman Paul
Saginaw, have made the case it’s unacceptable that a full-time, fast
food worker earns $7.25 an hour and lives 20 percent below the poverty
rate for a family of three.
A better
understanding of our minimum-wage workforce shows why a higher minimum
wage actually hurts the most destitute percentage within this portion of
our labor force. Data from the U.S. Bureau of Labor Statistics and
Census Bureau in recent years make the practical case.
The
numbers show that over half of minimum-wage earners are between 16 and
24, the majority of whom are part-time workers and typically not the
family’s sole breadwinner. Sixty-two percent of these earners are
currently enrolled in school, during the non-summer months.
And
among the nearly 50 percent of adult minimum-wage workforce (over 24
years old), more than half work part-time jobs and have an average
family income of $42,500 per year, according to a Heritage Foundation
analysis. The 2012 Current Population Survey also shows that
never-married workers were more likely than married workers to earn
federal minimum wage at about 8 percent versus about 2 percent of total
workforce population.
So, if most of our
minimum-wage workforce is under 25, still in school, unmarried and
working part-time in families above the poverty line, then who really
benefits from a higher minimum wage? More importantly, what are the
unintended consequences of this policy?
A
higher minimum wage will mostly benefit workers living above poverty and
reduce the availability of entry-level jobs crucial to unskilled
employees like Prusak, desperate for the opportunity to gain work
experience.
It is fashionable and cheap to
champion oneself a moral savior of the poor by advocating for a higher
minimum wage. In reality, by subscribing to that economic policy, the
unintended consequences have the opposite effect. As the Austrian
economist Ludwig Von Mises warned in his book “Liberalism,” “When the
[classical] liberal advises against certain popular measures because he
expects harmful consequences from them, he is censured as an enemy of
the people, and praise is heaped on the demagogues who, without
consideration of the harm that will follow, recommend what seems to be
expedient for the moment.”
Cody Ewers is the owner of Preamble Wine Company, a California-based wine label dedicated to public discourse and self-education. The Michigan native is a 2010 Hillsdale College graduate.
Reference Link: http://www.detroitnews.com/article/20130923/OPINION01/309230001/1008/OPINION01/Minimum-wage-hike-hurts-youth
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