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Employment Policies Institute Research Fellow Mike Saltsman on how an increase in the minimum wage impacts the job market.
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Ten well personal income in February inching up only zero point 2% according to Commerce Department with the average Americans hours stuck in neutral.
Democratic senator Tom Harkin is introducing legislation to raise the minimum wage by 35%.
But.
Is this the answer for struggling workers joining is a joining me is Mike salzman he -- of the employment policies.
Institute.
-- employment jobs I mean obviously with an unemployment rate over 8% that's going to be -- -- what happens to it into jobs when you raise the minimum wage -- -- -- Tell.
-- you know there's actually there's a lot of evidence out there of the last two decades and even stretching back to 1940s that shows.
You when you raise the minimum wage it's gonna adversely affect people who were just getting started in the labor force.
People we're sort of at the lower end of the career latter -- honesty -- -- young adults that's right teens and young adults and fifteen unemployment rate right now on the country's about 24%.
So it's gonna make them about 35% more expensive the higher.
It's gonna mean -- fewer of them can find work are we actually have a chart showing over the years how how unemployment is actually increase or employment has decreased.
For teens at exactly the points and -- the minimum wage goes up some people would say that's just coincidence is there any way to to say that one happened specifically because of the other.
Well there are you know economists have spent a lot of time trying to separate out identify.
Just fifteen jobs lost because a higher minimum wage it was a good stated it found in the minimum wage -- -- -- time between 2007 and 2009.
A little over a 1141000.
Teens.
That lost their jobs because of that the higher labor costs and so.
It is possible to find out I think the evidence shows that there's been a lot of teams -- been thrown out of work because of rising -- -- and it's particularly tough with minority teams there's one study.
I think this is a Princeton study that found that among black males who -- between sixteen and 24.
Every time -- have a 10% increase in the minimum wage you have a 5%.
That's right yeah for black males it was six point 5% for white males it was somewhere -- now down -- 2%.
I is that there is going to be a disproportionate impact.
I think especially right now when we're talking about a struggling labor market when we're talking about going into the summer months.
When people are looking for those part -- opportunities.
We need to be more focused on just getting people into the workforce they can work their way -- -- -- -- on their own.
As most minimum wage -- do they usually are raised in the first one to twelve months on the job.
-- they just need a chance to get the experience they can get that -- okay we have the Fed's role minimum wage but we each state.
-- is different states have their own minimum wages and -- -- quite high even higher than the central average right now what happens.
To those states.
Because that's kind of a -- example of what might happen to the nationwide may raise their minimum wage.
Sure so you know what's happened a lot of states as it's become.
You know more and more difficult for young people -- and even people in industries like the service industry to find work.
Washington State and has a minimum wage over nine dollars an hour.
I've had a really tough impact on the restaurant industry there you know the industry is and hiring fewer bus boys they've been having servers cover more tables.
I in those instances not just that not just employees suffer the customer suffered -- as customer service declines.
I think -- the costs continue to go up they're going to be a lot of industries that find it makes more sense I just to move towards self service technology and you look at what grocery stores are doing.
Moving towards self checkout lanes instead of hiring people -- bag groceries I think.
As more industries do that they're going to be fewer opportunities.
For the people used to fill those jobs as a direct consequence of these -- labor -- now Mike I assume that some of the people that support your organization or those smaller retailers particularly small restaurants.
How about.
Anybody representing.
Youth did that teen -- -- unemployed I mean are there are there advocates like that who come out and say they agree with -- or not or is it just the industry reps.
Now -- you know I think there are a lot of people out there I think if you talk to economists from across the spectrum you know people who are universities who have been studying this issue for years they say look.
If we're trying to reduce poverty the evidence shows that the minimum -- Is not very well targeted people or horrible what it -- does do.
Is it raises the labor cost for young people -- -- I don't think this is partisan thing I don't think it's an industry thing I think it's just economic sense.
I you know it -- something people -- economics one of one you know when you raise the price is something.
People are gonna demand lots of it that that goes double for -- for employers in the service industry might -- from the employment policies institute Mike thank you very much for coming in appreciate it.
Happy to be here -- the --
