Rio Grande Foundation Study Exposes Proposed Minimum-Wage Hike as Misguided, Harmful Policy

(Albuquerque) In response to efforts underway to raise the minimum wage in Albuquerque from $7.50 to $8.50 and indexing it to inflation, the Rio Grande Foundation has released a new report detailing the negative impacts of minimum wage hikes. The report, “Raising Albuquerque’s Minimum Wage: A Misguided Anti-Poverty Measure at Best, A Cruel Impediment to Work at Worst,” is available on the Rio Grande Foundation’s website.

Among the items to be found in the report is the fact that any increase in the minimum wage would be poorly-targeted in terms of reaching those who is supposed to benefit from the bump in wages.

  • “According to data from the Census Bureau, approximately half of all minimum wage workers are in what might be called their “prime working years (26-65).” Said Gessing, author of the report, “As one would expect, about half of New Mexicans working at the minimum wage are either just getting started in the workforce or are working “odd-jobs” that allow them to make some extra money as the move towards full retirement”;
  • Also, only approximately 20 percent of those currently earning the minimum wage in New Mexico are the breadwinner in their families and supporting children. More than 50 percent either live with their families, a spouse, or have some other family support structure in place to pay a majority of the bills;
  • The average family income of families with a minimum-wage earner exceeds $55,000 and the median exceeds $43,000 annually. Clearly, the archetypical single mom supporting kids on a minimum wage salary is not the norm.
  • Advocates assume no negative externalities of their preferred policies, but New Mexico’s teen unemployment rate is currently 22.6 percent – up dramatically from 13.2 percent in 2002 (prior to the last Congressionally-mandated bump in the minimum wage and the recent economic downturn). Increasing Albuquerque’s minimum wage could push even more young people out of the work force entirely.

Concluded Gessing, “Even if we assume nothing but benefits will accrue to those at the bottom rung of the employment ladder, an increase in the minimum wage is a poorly-targeted anti-poverty policy. After accounting for the fact that some otherwise employed individuals will lose their jobs as a result, a hike in the minimum wage becomes an impediment to the skills, discipline, and self-esteem associated with holding down a first job.”

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3 Replies to “Rio Grande Foundation Study Exposes Proposed Minimum-Wage Hike as Misguided, Harmful Policy”

  1. Once again, in the hope (misguided hope) that liberals will get it: the minimum wage was NEVER to provide a long term job. It was started as a training wage so kids could learn how to work. Liberals have destroyed the labor pool with their lax laws about drugs and other wasteful lifestyles and created a permanent underclass of wasted adult losers that can’t move up from minimum wage jobs to real meaningful jobs. That is why they keep pushing for an increase in the minimum wage; it is to keep their slothful slave population in line.

    If we throw out the minimum wage, and also throw out all the illegals who steal jobs from Americans, we force the slothful to WORK or suffer the consequences of not working. If they don’t have to compete with sub-minimum wage illegals, the wages will rise because there will be vacancies in the job markets caused by the elimination of foreign criminals.

  2. Another sad attempt at political pandering that only hurts the very people for which it purports to help.

    Looks kids, we’re increasing your minimum allowance to take out that trash and pick up your rooms. We want to be the “cool” parents…we’re your friends.

    That of course quickly turns to; Kids, your mom and I think it’s time that you went out into the real world to get a real job…we just can’t afford to subsidize a life style choice of sitting at home and playing video games, while we have to constantly remind you to take out that trash.

    NO MORE ALLOWANCE FOR YOU!!!

    Oh, and by the way, kids, Billy, down the street, who’s parents don’t give him an allowance, has offered to take out our trash, and mow the yard…and for the exact same amount that we were paying you just to take out the trash. No worries though, a real job will teach you the value of work and a paycheck….good luck beating the Billy’s of the world out of those “real” jobs, in the “real world”!

    Oh, and Billy…good luck beating the China’s of the world out of future jobs, for “real wages”!

  3. I recently read a joke about parents who called their kids in for a family conference and told them, “We’re sorry kids, but because of downsizing, we are going to have to let one of you go”.

    Come to think of it, employers will do that because of increases in the minimum wage. Unless an employee is actually WORTH what they are being paid, they are not worth keeping on the job. So employers will face another round of layoffs, picking the worst employee and firing them. Of course, the leftist press never reports on that or the true reason for it.

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