Minimum wage – maximum carnage

Policymakers claiming to represent the best interests of unemployed American workers are seeking to raise the minimum wage, despite economic studies concluding that a higher minimum wage destroys jobs for the most vulnerable population: uneducated and unskilled workers, says the Wall Street Journal.

The Journal of Economic Literature (JEL) has established a rule of thumb that a 10 per cent increase in the minimum wage leads to roughly a 2 per cent hike in teenage unemployment. Indeed, raising the minimum wage is about the most ineffective poverty abatement programme ever conceived, says the Journal.


  • Compassionate liberal Ted Kennedy wants to raise the minimum wage to $7.25 from $5.15 an hour this autumn.

  • That 40 per cent mandated wage hike would very likely raise the teenage unemployment rate even higher.

  • He must think low-wage workers are better off with no job at $7.25 an hour than a real job at $5.15 an hour.

    This year already, seven states have enacted wage requirements above the federal minimum, bringing the total to 17. About 20 states, including California and Massachusetts, have pending legislation or ballot initiatives to raise their wage requirements to as high as $8 an hour.

    With one out of every three black teenagers now legislatively priced out of the job market, the Journal wonders how much higher the jobless rate must go before politicians understand the folly of their false compassion, says the Journal.

    Source: Editorial, Job Slayers, Wall Street Journal, August 29, 2005.

    For text:,,SB112527778040525221,00.html

    For more on Economic Issues: Minimum Wage:

    FMF Policy Bulletin/ 13 September 2005
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