Delay the Minimum-Wage Hike
by David Neumark

Despite severe economic difficulties confronting businesses, and soaring unemployment among youths and minorities, the federal minimum wage is slated to increase to $7.25 in July from $6.55 today. This will be the final step of a three-step increase enacted in the spring 2007, when the unemployment rate was 4.5%.

Based on 20 years of research, I doubt there is ever a goodtime to raise the minimum wage. However, with the aggregate unemployment rate at 9.4%, the teen unemployment rate exceeding 22%, and the unemployment rate for black teens nearing 40%, next month’s increase seems like the worst timing possible.

There have been countless studies that show the negative effects of minimum-wage laws on both teenagers and African-Americans. The increases of the minimum wage will have more full-time jobs shift to part time work and more unemployment for low-skilled workers. Unfortunately our ever-pathetic Congress does not have the political will to make the logical economic decisions to delay/terminate the increases.

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