Matt Yglesias posted a few days ago lamenting the high rate of unemployment for low-skilled American workers:
The brunt of the burden of unemployment is being borne by the least-skilled members of the workforce. In part that’s because high-skill occupational categories haven’t been hammered as heavily as construction and manufacturing…. It’s perhaps a sign of a more efficient, more flexible economy that we’re getting “better” at shifting recession-related burdens onto the low-skill people who are probably worst-positioned (in terms of savings and social capital) to deal with economic distress.
Low-skilled workers, already disadvantaged relative to other Americans, have been hit particularly hard by the recession, as Yglesias points out. In light of this, we should support pro-employment policies so that this group of Americans will have an easier time finding jobs. But among all the media coverage of the job creation potential of the stimulus this summer, it was easy to miss the job-killing measure that went into effect on July 24: the 70 cent hourly minimum wage increase from $6.55 to $7.25. According to UC Irvine economist David Neumark, the wage hike will kill about 300,000 jobs for worders aged 16-24.
Granted, the number of jobs destroyed by this minimum wage hike is probably small compared to the overall low skilled unemployment effects of economic structural changes that Yglesias discusses. Certainly the reason that the United States is hemorraging low skilled jobs at the current rate isn’t because of our minimum wage laws. But that doesn’t change the fact that our minimum wage laws are counterproductive and hurting the very people that they are supposed to help. It’s unfortunate that the professed concern for the poor of influential progressives like Yglesias never leads to criticism of the minimum wage.
What’s especially frustrating for those of us who really care about helping low-wage workers is that there is a program that does what the minimum wage is supposed to do (increase pay for low-wage jobs) and avoids raising employment barriers for the same group it’s intended to help: Earned Income Tax Credits, which subsidize low-skilled workers without raising costs for the employer. Rather than pushing for increases in the minimum wage, progressives should be clamoring to increase EITC. If being progressive is about wanting to help the poor, then this should be the progressive position.
Progressives’ continued support for minimum wage increases shows that as a group, despite their populist rhetoric, they don’t care enough about poverty to take the time to learn which policies actually help the poor and which do not. Instead, they choose to ignore the economic evidence and continue to engage in counterproductive altruistic signaling aimed at the economically illiterate.