Senators Edward Kennedy, D-Mass., and Rick Santorum, R-Pa., both introduced proposals to increase the minimum wage from its current $5.15 an hour. Sen. Kennedy's proposal would have raised the minimum wage to $7.25 in three steps over 26 months, while Sen. Santorum's would have raised it to $6.25 in two steps over 18 months. Two weeks ago, both measures failed passage in the Senate.
Sen. Kennedy said, "I believe that anyone who works 40 hours a week, 52 weeks a year, should not live in poverty in the richest country in the world," after telling fellow senators that minimum wage workers earn $5,000 below the poverty line for a family of three. Sen. Santorum said, "I feel very comfortable that our proposal keeps the balance between the ability of lower-skilled employees to enter the work force at a wage in which they are compensated for the skills they bring to the job."
The idea that minimum wage legislation is an anti-poverty tool is simply sheer nonsense. Were it an anti-poverty weapon, we might save loads of foreign aid expenditures simply by advising legislators in the world's poorest countries, such as Haiti, Bangladesh and Ethiopia, to legislate higher minimum wages. Even applied to the United States, there's little evidence suggesting that increases in the minimum wage help the poor. Plus, according to the Bureau of Labor Statistics, only 2.2 percent of working adults earn the minimum wage.
The crucial question for any policy is not what are its intentions but what are its effects? One of its effects is readily seen by putting yourself in the place of an employer and asking: If I must pay $6.25 or $7.25 an hour to whomever I hire, does it make sense for me to hire a worker whose skills enable him to produce only $4.00 worth of value per hour? Most employers would view doing so as a losing economic proposition. Thus, one effect of minimum wages is that of discriminating against the employment of low-skilled workers.
For the most part, teenagers dominate the low-skilled worker category. They lack the maturity, skills and experience of adults. Black teenagers not only share those characteristics, but they are additionally burdened by grossly fraudulent education, making them even lower skilled.
Bureau of Labor Statistics unemployment data confirms the economic prediction about minimum wage effects. Currently, the teen unemployment rate is 16 percent for whites and 32 percent for blacks. In 1948, the unemployment rate for black teens (16-17) was lower (9.4 percent) than white teens (10.2 percent). Plus, black teens were more active in the labor force.