Government Policy and Unintended Consequences

Congress was warned before they passed minimum wages legislation last year that these changes would negatively impact employment. The minimum wage went from $5.15 to $5.85 last year and is scheduled to move to $6.55 next month. Even more worrisome is the move next year to $7.25 and the impact it is sure to have on employment.

There have been many articles in the local and national papers that are documenting the tough time teenagers are having finding summer jobs. According to the latest government report on employment, kids 16-19 years old have an unemployment rate of 18.7%. Who works for minimum wage? It has traditionally been kids 16-19 years old with few job skills. The higher wages encourages employers to find ways to cut back on hiring since it cost more. When anything costs more, less is demanded at that price. Labor is not immune to the law of supply and demand. While the intent of higher minimum wages is good, the actual practice makes it harder for low-skill people to find jobs. I am sure Congress will forget they are the cause of most of the increase in unemployment....