This week the International Monetary Fund’s (IMF) annual U.S. economy review urged an increase in the U.S. minimum wage rate, describing it as “low by both historical and international standards and saying an increase would raise incomes for millions of working poor Americans.”
Actually, it’s just the opposite. As Heritage’s James Sherk testified last year, minimum wage laws often “hold back many of the workers its proponents want to help.” Even worse, as The Daily Signal reported in March, an Express Employments Professionals survey showed “a whopping 38 percent of employers said that they would lay off employees if the proposed [minimum wage] hike went into effect.”
Those layoffs would be toughest for young workers. Sherk reports that “the vast majority of minimum-wage workers are second (or third or fourth) earners in their family.” He notes that many of them are between the ages of 16 and 24, and most of them work part-time. These entry-level positions are where they gain experience so they can quickly move up to higher paying jobs.
What about the IMF’s claim the U.S. minimum wage is “low by both historical and international standards”? Well, that’s wrong, too. In fact, as Heritage has reported, “Correctly adjusted for inflation, the minimum wage currently stands above its historical average since 1950.”
Maybe IMF analysts weren’t aware that more than 500 economists—including three Nobel laureates—told Congress that President Obama’s proposal to hike the minimum wage is a job killer? In any case, by embracing major tenets of redistributive Obamanomics, the IMF has left no doubt that it has departed from the orthodox policy advice of fiscal discipline and market-oriented reforms it has heretofore given countless developing countries.