President Obama urged Congress to raise the minimum wage in his State of the Union address. His campaign group, Organizing for Action, has a video out with the same message—and it makes two big (but common) mistakes about the minimum wage.
In fact, its argument is based on these mistaken assumptions. Pass these on.
Assumption #1: People are trying to work entire careers and save for retirement on the minimum wage.
The video says, “It’s harder than it should be to raise a family and save for retirement.” But the majority of minimum-wage earners aren’t doing these things.
As Heritage expert James Sherk explains:
Data from the Bureau of Labor Statistics and the Census Bureau show that most minimum-wage earners are young, part-time workers and that relatively few of them live below the poverty line. Their average family income is over $53,000 a year. A hike in the minimum wage primarily raises pay for suburban teenagers, not the working poor. If Congress and the President seriously want to help the working poor, they should look elsewhere.
Assumption #2: Raising the minimum wage would “give America a raise.”
Sure, everyone feels that he or she works hard and deserves a raise. But asking Congress to “give America a raise” by upping the minimum wage? Again, it just doesn’t apply.
Not only are minimum-wage earners a small fraction (about 3 percent) of the American workforce, but they also don’t stay in that bracket for very long. Sherk says: “The minimum wage does not need to rise for minimum-wage employees to get a raise. Two-thirds of minimum-wage workers make above the minimum wage a year later.”
Minimum-wage jobs are a stepping stone for young people getting started in the workforce. And they are the ones who would be hurt by a minimum wage hike—because those jobs could start disappearing.