Seven Minimum Wage Facts That Have Democrats Worried

Seven Minimum Wage Facts That Have Democrats Worried

on Sun, 5 Jan 2014

With the midterm elections just over 300 days away, nervous Democrats reeling from the Obamacare debacle are hoping a big push to raise the minimum wage will be the silver bullet that will spare them from the historic losses they suffered in 2010.

Democrats and unions are busy working to get minimum wage initiatives on state ballots in the hopes of creating an electoral “minimum wage magnet” to attract low-income, minority, and union voters to the polls.

Seven minimum wage facts, however, may diminish Democrats' high hopes.

1. Just 2.8% of American workers earn at or below the minimum wage.

The U.S. Department of Labor says 1.6 million people make the federal minimum wage of $7.25 an hour. Another 2 million earn below that rate, such as restaurant servers who make tips in addition to a lower base hourly wage which, according to U.S. News and World Report, "in many cases actually puts them significantly above the minimum wage in reality, if not officially." That means in a nation of 317 millionpeople, just 3.6 million (1.1%) make at or below the minimum wage. As a share of the U.S. workforce, just 2.8% of people working make minimum wage.

2. Half of all minimum wage workers are 16 to 24 years old.

According to the Department of Labor, "minimum wage workers tend to be young," and "about half of those paid the Federal minimum wage or less" are below age 25. Many of these are students working while in school or teenagers with part-time or summer jobs. That means half of the people most affected by a minimum wage hike are among those least likely to show up at the polls to vote, especially in a midterm election year. Indeed, minimum wage workers who are 16 and 17 years old are not even legally eligible to vote.

3.  Labor workers already make well above the minimum wage.

Democrats and unions hoping labor workers will be energized by a minimum wage bump will be sad to know that laborers in every single sector of what the government calls "production and nonsupervisory employees"—like manufacturing, construction, mining, retail, transportation, etc.—already earn well above the minimum wage. In fact, in November 2013, the government reported that the average hourly labor wage across all industries was $20.31—a figure nearly three times the federal minimum wage. And as the unions themselves boast, a union member's annual salary is already $10,400 higher than a non-union worker.

4. Even those who support minimum wage hikes concede it could kill jobs.

Many economists and conservatives point to the body of economic literature that shows minimum wage increases kill jobs and simply encourage companies to pass along the added cost in the form of higher prices. But even ardent supporters like socialist Seattle City Council member Kshama Sawant, who recently helped pass a $15 minimum wage in the SeaTac, Washington, concede the move could spawn job losses. "There may be a few jobs lost here and there, but the fact is, if we don't fight for this, then the race to the bottom will continue," saidSawant. 

5. Minorities and the poor are hit hardest by the minimum wage.  Nobel Prize-winning economist Milton Friedman famously noted that "the most anti-black law on the books of this land is the minimum wage law." Higher wages mean employers seek higher, more skilled workers. That, said Friedman, puts those with disproportionately less education and experience at a significant disadvantage when looking to put their foot on the first rung of the employment ladder. 

6. Even progressives concede the minimum wage is no panacea for America's economic woes.

President Barack Obama's former chairwoman of the Council of Economic Economic Advisers Christina Romer says, "economic analysis raises questions about whether a higher minimum wage will achieve better outcomes for the economy and reduce poverty." As a result, says Romer, "most economists prefer other ways to help low-income families." Similarly, progressive Daily Beast writer Jamelle Bouie says while he supporters the move, "the minimum wage is a Band-Aid for wage stagnation and income inequality" and "doesn't make up for our sluggish economy and weak labor market."

7. 21 states already have minimum wages that are higher than the federal $7.25/hr rate.

Just last week, 13 states boosted their minimum wage rates above the federal minimum wage rate of $7.25/hr. That means 21 states now already have minimum wages that exceed the federal rate.

For these reasons and more, Republicans see Democrats' minimum wage tactic as a desperate attempt to run from the Obama record.

"If I had a dollar for every time Democrats thought their issue of the week was going to be their pathway to victory, I would have enough money to pay taxpayers back all the money that was wasted on the broken Obamacare website,"said Republican Congressional Campaign Committee spokeswoman Andrea Bozek.