The American Enterprise Institute’s Mark J. PerryMark J. Perry put s compelling twist on the $10.10 minimum wage push:
Suppose that instead of discussing an increase in the minimum wage by debating whether or how much an increase from $7.25 per hour to $10.10 would affect employment, future hiring, hours worked, etc. we thought about that increase in the minimum wage as a tax on employers hiring unskilled workers as follows:
Increasing the minimum wage from $7.25 to $10.10 per hour would be a $2.85 “unskilled labor tax” per hour on employers, which would be an “unskilled labor tax” of $114 per week and $5,700 per year per full-time minimum wage worker.
When thinking of a minimum wage hike as a $5,700 annual tax per unskilled …, is there any doubt that an “unskilled labor tax” that high wouldn’t result in predictable changes in employer behavior that would have adverse effects on workers with no or few skills? …
So from now on when you hear the term “$10.10 per hour” (According to Obama, “ten-ten” is so “easy to remember”) think instead of a $5,700 annual tax per unskilled worker …and you’ll better understand why artificially raising the minimum wage through government fiat is a very bad idea.
Perry adds that including payroll taxes, the wage hike would actually amount to a $6,170 per worker tax.
The cost would be even higher if the “Fifteen for $15” Service Employees union campaign gets its way.