CNN Calls 'The People' Winners in Calif. Minimum Wage Hike
âA three-year battle over the minimum wage is now over,â and âit looks the people won,â CNNâs Heidi Collins flatly declared a few minutes before noon on the September 13 edition of CNN âLive Today.â But in doing so, Collins blindly accepted a liberal talking point about the minimum wage.
Collins was introducing Susan Lisovicz at the New York Stock Exchange for a business update. Lisovicz agreed that âthe people won and perhaps the politicians wonâ with the signing of a minimum wage hike in California.
âThe new law will make Californiaâs minimum wage the highest in the country by 2008 when it goes to $8 an hour.â
But economists say the winners and losers are not as clear-cut as Collins and Lisovicz said. While some low-wage earners will benefit from a higher wage, the artificial wage floor could push other workers out of jobs as the cost of labor goes up, forcing some businesses to lay off workers or freeze hiring.
As the conservative Heritage Foundationâs Dr. Tim Kane noted in a March 4, 2005, WebMemo, âA survey published in the Winter 2005 Journal of Economic Perspectives, an academic publicationâ finds that fully â71 percent of economists at Americaâs top universities agree with the statement âa minimum wage increases unemployment among the young and unskilled.ââ
Whatâs more, as economist David Neumark has found, there are negative âlonger-run effectsâ of minimum wages on young workers.
âThe evidence indicates that even as individuals reach their late 20's, they work less and earn less the longer they were exposed to a higher minimum wage, especially as a teenager,â Neumark argued in the abstract of his study.
In other words, an artificial wage floor changes the natural pressure low wages put on unskilled or low-skilled young workers to develop their work skills and in so doing command higher wages.