The Economic Policy Institute (EPI) has come out with a study that demonstrates how the inflation adjusted earnings of low wage workers (defined as “wage-earners at the 20th percentile”) have fallen over the past four years (2009-2013).
The decline in real wages occurred in every state but three (West Virginia, Mississippi, and North Dakota). The study found a national average hourly wage drop of $0.68 (6.4%). This finding led, unsurprisingly, to the EPI author’s support for President Obama’s proposal to raise the minimum wage to $10.10 per hour.
But, declining wages for the poorest paid workers demonstrates that employers are taking advantage of a surplus of those workers. Among that surplus of workers are millions of illegal aliens. A more responsible policy to help the nation’s most economically disadvantaged workers would be to diminish the competition from illegal alien workers by better enforcing the law against employers hiring them.
The EPI and Obama proposal of an increased minimum wage has now been estimated by the Congressional Budget Office as likely to destroy about half a million jobs.
The CBO also found that a minimum wage increase would increase earnings for those who still had jobs. However, besides costing job opportunities when unemployment among low wage workers is already unacceptably high, that action would also benefit those illegal alien workers who are competing with fake or stolen ID for those scarce jobs, and it would also increase the attraction for other aliens to try come in search of those jobs.
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From 2000 to 2013, the working-age, native-born population increased by 16.4 million, yet the number employed fell by 1.3 million. The number of working-age immigrants increased by 8.8 million and the number working rose by 5.3 million. For every two Americans trying to find a job in our high-unemployment economy there is an immigrant applying for the same jobs. And the immigrants are the ones hired, often by employers who compete successfully with other businesses by hiring only immigrants, at lower wages. That process gradually forces down wages for all workers who compete with immigrants for jobs. The most obvious way to increase wages for the poorest workers is to cut immigration and force illegal aliens out of our job market. And those effective measures would cost next to nothing.
Raising the Minimum Wage is a Shotgun to Fix the Poverty Problem too
Much of the extra $/hr goes to households that aren’t in poverty.
Note that the study does not tell us “why” these “inflation adjusted wages” have decreased!!
Since inflation has been very low and the cost-of-living has changed very little between 2009 and 2013, our only conclusion is that these “average” Wages for low wage earners have decreased because there are no jobs for these people or they have been forced into part-time jobs for which they work fewer hours. If there is any other explanation, I would be interested to see it.
Therefore, raising the minimum wage does exactly the worst thing to improve the effective wages for the poor. It will kill jobs and it will also force businesses with very low margins to force more employees into part-time jobs!
No doubt they will be all aghast over this study at certain web sites. Heartless cruel big business, they will proclaim. Yeah, we know they’re not in business because they are worried about their workers. But many of those same people at those certain web sites will then line up to cheerlead for the Senate “reform” bill that was essentially written by big business and will flood this country with millions more visa workers every year, sending wages even lower.