Perhaps unsurprisingly, I had a number of issues with the president's speech last night. But the part I found most viscerally frustrating was the section on the federal minimum wage, which President Barack Obama said should be increased to $9.00 per hour. There were any number of falsehoods promulgated and unintended consequences ignored. The one bit I want to focus on, however, deals with raises.
"Working folks shouldn’t have to wait year after year for the minimum wage to go up while CEO pay has never been higher," Obama opined. I have some good news for the president: they don't!
The myth that minimum wage employees slog along at $7.25 per hour forever is a pernicious one, and is held, if I had to guess, mostly by people who have never actually worked a minimum wage job. It is based on the idea that minimum wage workers are schlubs at the mercy of their employer and can only lift themselves up when the government puts its foot down.
I can't emphasize how untrue this is.
The simple fact of the matter is that most minimum wage employees earn raises all on their own, through hard work and the gaining of experience. Here's a summary of a study on the minimum wage by Dr. Bradley Schiller:
Schiller finds that very few adults are "stuck" at minimum wage jobs; while approximately a quarter of the adults in the survey at one point earned at or below the minimum wage during the eight year period, roughly 95 percent of the adults survey also earned considerably more than the minimum at some point in that same period. This is consistent with earlier research that shows that a majority of minimum wage employees earn a raise within 1 to 12 months on the job.
I could bore you with my own experiences in the field, but suffice it to say that if I as a 15-year-old novice could earn a raise after less than six months on the job that a grown-ass person can do the same.
The sad fact is that those few employees who cannot earn a raise on their own, without government interference, probably aren't worth employing at all at the higher wage rate. They may not be fired when the new minimum goes into effect, but they will likely see their hours cut. Some cohorts—more specifically teens, and even more specifically minority teens—won't be hired at all.
These are the wages of demagoguery: fewer jobs, fewer hours worked, less experience gained, and more dependence on government.