Abolishing Minimum Wage

Abolishing the Minimum Wage Many Americans think of the minimum wage as a means of raising the income of the working people. However, the minimum wage is not the best way to combat poverty. In fact, the minimum wage does more harm than good. The list of its negative effects is a long one: it causes unemployment; it prevents unskilled workers from getting the on-the-job training they need; it encourages teenagers to drop out of school; it promotes the hiring of illegal aliens; and it increases welfare dependency. For all of these reasons, the minimum wage should be eliminated. To evaluate the minimum wage, we must first understand why it was originally created and what its historical effects have been. The minimum w age was introduced in 1938 by President Franklin Roosevelt. According to Dr. Burton W. Folsom (1998), a senior fellow in economic education for the Mackinac Center for Public Policy, the driving force behind this new legislation was not the plight of the working poor but the political might of the highly paid textile workers of New England, who were trying to protect their jobs as they faced competition from Southern textile mills. The Southern mills were able to produce cloth of equal quality more cheaply than their counterparts in the North because of the lower cost of living in the South, which allowed Southern factories to pay lower wages to their workers. In response, Northern politicians successfully fought for legislation that would force Southern textile mills to raise wages, against the objections of Southern congressmen and many economists who warned that ”people whose skills and experience were [worth] less than whatever Congress decreed as the minimum wage would be priced out of the labor market” (Folsom, 1998). According to Folsom (1998), the dire prediction of those who opposed the minimum wage came true; the wage increases mandated by Congress caused unemployment levels to rise in 1938, when the minimum wage was instituted, and

References: Bartlett, B. (1996, April 24). The minimum wage trap. National Center for Policy Analysis. Retrieved August 30, 2008, from http://www.ncpa.org/ba/ba201.html Bartlett, B. (1999, May 20). Minimum wage teen-age job killer. National Center for Policy Analysis. Retrieved August 30, 2008, from http://www.ncpa.org/ba/ba292.html Boushey, H., & Schmitt, J. (2005, December 13). Impact of proposed minimum-wage increase on low- income families workers. (2004, July 15). Business Council of New York State. Retrieved August 15, 2008, from http://www.bcnys.org/whatsnew/2004/0714mwage.htm Du Pont, P. (1995). Pay hazard-raising the minimum wage. National Review, 47(8),72-74. Folsom, B. W., Jr. (1998, June 1). Minimum wage causes maximum pain. Mackinac Center for Public Policy Kersey, P. (2005, April 4). The minimum-wage hike: Good for the working or middle class teens? The Maryland Public Policy Institute Institute. Retrieved August 20, 2008, from http://www.epinet.org/issuebriefs/finallyr_ib127_1998.pdf The myth of the minimum wage [Editorial]. (1999, May 17). Business Week, 170 Neumark, D idleness. Employment Policies Institute. Retrieved August 20, 2008, from http://www.epionline.org/study_detail.cfm?sid=57 Reynolds, A. (2004, July 25). When more is less. Cato Institute. Retrieved August 28, 2008, from http://www.cato.org/pub_dsiplay.php?pub_id-2754), 14.