George Will has a fantastic piece in today’s Washington Post examining all the reasons why raising the minimum wage–or any federal minium wage at all for that matter–is bad economic policy. It is worth reading in its entirety (link is here), but I’ll quote the information that I hadn’t heard before. Basically, many minimum wage workers are high school age. When the minimum wage goes up, work becomes more attractive. School, on the other hand, becomes less attractive. The drop out rate tends to go up with the minimum wage:
“Forty percent of American workers are salaried. Of the 75.6 million paid by the hour, 1.9 million earn the federal minimum or less, and of these, more than half are under 25 and more than a quarter are between 16 and 19. Many are students or other part-time workers. Sixty percent of those earning the federal minimum or less work in restaurants and bars and are earning tips — often untaxed, perhaps — in addition to their wages. Two-thirds of those earning the federal minimum today will, a year from now, have been promoted and be earning 10 percent more. Raising the minimum wage predictably makes work more attractive relative to school for some teenagers, and raises the dropout rate. Two scholars report that in states that allow persons to leave school before 18, a 10 percent increase in the state minimum wage caused teenage school enrollment to drop 2 percent.”
Unfortunately, economic facts aren’t what’s motivating the push to raise the minimum wage.