Op Ed: Raising Minimum Wage Could Cause Maximum Pain For Teens
It’s time to stop the minimum wage madness in New Mexico! Setting price floors for human labor is both bad economics and unfair to the very workers it is supposed to help. Already, Santa Fe has among the highest mandated wages in the nation at $10.29 an hour. Only wealth San Francisco currently has a higher wage.
Albuquerque recently enacted a wage of $8.50 an hour. Now, Bernalillo County may get into the act by adopting legislation that would match Albuquerque’s rate.
As if that is not enough, some in the Legislature plan to push for a statewide increase in the mandated wage during the 2013 legislative session.
It would be great if politicians and bureaucrats could wave a magic wand and increase living standards for low-wage workers, but they can’t. Businesses must make a profit and must find that hiring an individual at a given rate enhances their ability to make a profit. In a free market economy, the vast majority of workers earns above the minimum wage because their labor is worth what their employers are willing to pay.
It is poorly-educated and unskilled workers who bear the brunt of wage mandates because their labor is worth the least to their employers. They are the first to be fired when wage mandates are enacted or increased. Is higher unemployment really what we want?
The data bear this trend out. In Santa Fe, which has had its high minimum wage rate for years, 16-24 year old workers face a 22% unemployment rate. Before Albuquerque raised its rate, 16-24 year old workers faced an unemployment rate of just 9%.
For many young people, learning work skills and responsibility is far more important than a mere wage. Do we really want more young people at home on their couches playing video games because they can’t find a job?
It’s time to stop the minimum wage madness!
Paul Gessing is president of the Rio Grande Foundation