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  • Taking their cues from Obama's State of the Union address almost two months ago, liberal leaders continue to push for a national minimum wage increase.YMIG

    Which could spell deep trouble for young people trying to break into the job market

    National Journalism Center graduate and Reason columnist Vera Soliman explained in a post last week that some small businesses are already anticipating the hike.  One Virginia Beach shop owner already plans to lay off 10 employees, replacing them with touch screen menus.  This follows the trend of chains such as Sheetz, which has eliminated person to person ordering. 

    According to the Washington Post, businesses in the United States last year averaged a 7.6 percent profit margin.  Obama demanded that Congress raise the minimum wage by 24 percent.  The Detroit News said in February that this idea had to "come from an alternate universe."  To simply survive, many businesses must raise prices (which Obamacare has already forced in some sectors) or trim labor costs. 

    The Detroit News also emphasized the effect on young workers.  It said

    The result was a plunge in working youth. Teen unemployment today is at its highest levels since records were first kept in 1948 with only 25 percent of 16-19-year-olds working. Black teens in cities like Detroit are already reeling from last year's 42 percent unemployment rate, a significant increase from just a few years ago.

    After the last spike in the minimum wage, Dunkelberg claims teen jobs disappeared.

    Who benefits from minimum wage increases?  Not the labor market, which tightens.  Not consumers, who pay higher prices.  Big business benefits.  The Washington Examiner's Tim Carney noted during the last push for minimum wage increases, Wal Mart and Costco lobbied for the hike.  Why?  Because it made small business less able to compete.  Minimum wage raises benefit crony capitalists.  Big businesses can spread the labor costs more effectively than small ones. 
     
    And more small businesses close their doors as a result.  Meaning fewer opportunities for both young workers and aspiring entrepreneurs.
     
     

     

     


    • Readers' Comments

    • Could you please clarify how layoffs due to technology advances such as installing touch-screen menus is related to this? Because that's the profitable thing for businesses to do in any situation, and has nothing to do with employment rates. If it does affect the economy though, then we'd better start uninstalling all technologies that cause lay-offs, such as mass-production machines! After all, there would be a whole lot more jobs if those no longer existed, since then the people could make the things rather than the machines, using this logic.
      Posted by on 04/08/2013
    • What is also historic is President Obama's rfsueal to attend the ceremonies commemorating the 20th anniversary. He has time to campaign, jet to Europe to lobby for the Olympics, and attend music festivals at the White House, but he can't take time to celebrate the downfall of communism?
      Posted by Natalya on 04/24/2013
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    • nbmrKl Thanks for the blog article. Keep writing.
      Posted by 9157 on 07/18/2014
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