Is it possible that two of President Obama’s pet proposals are nothing more than talking points?
They sound good to the liberal base and to others who would like to “help” people without pausing to think to hard about whether these proposals actually work. But both fall far short of what they are cracked up to be.
The two proposals are hiking the minimum wage and “free” community college for everybody. Opposing these ideas makes you sound like Scrooge, but in reality neither is going to favorably affect a large number of people.
The “free” community college proposal, if made law, would cost $60 billion and provide less than $4,000 a year to community college students. While hardly a negligible number, that is an amount students might be better off earning themselves. (See my take on “free” community college here.) Likewise, hiking the minimum looks like flimflam if you actually look at the numbers.
Market Watch, hardly a conservative bastion, had a story that broke down the segment of the population who earn the minimum wage. The subhead said that “most are whites, women, food workers , young and uneducated.” But you have to get behind the subhead and look at the actual numbers to see how few people would be helped by a hike in the minimum wage. It is also worth noting that hiking the minimum wage would put a lot of these minimum wage earners out of work.
The number of people who earned the minimum wage in 2013, according to government figures, was 3.3 million in 2013. The percentage of U.S. workers who earned at or below the minimum wage in 2013 was 2.4. The percentage of full-time workers (now defined as 35 hours a week) who earned the minimum wage is 1.01 percent.
So when the president talks about giving America a raise, he is basically talking about giving 1.01 percent of America a raise. Some of these would get laid off instead: employers will not retain some entry-level workers or workers with marginal skills if they become more expensive to hire.
Of this small percentage of Americans who work for minimum wage, 77.4 percent are white and 62.4 percent are African American. But the geographical breakdown is more interesting: 46.4 percent of minimum wage workers live in the South. But one southern state, Texas, the state liberals love to hate, has only 12.1 percent of its workers at the minimum wage level. That is a smidgen above the West in general where the percentage of workers on the minimum wage is 12 percent.
The age and marital status breakdown is also revealing: 50.4 percent of minimum wage workers are young people between the ages of 16 to 24. This makes up about 1.66 million workers. These are people with by and large entry level jobs. If they perform well, they will move up. If we hike the minimum wage, it is obvious that some of them will not be able to find the entry level jobs that introduce them to the adult world of full-time employment.
The stats on marriage seem to show that getting married can at least marginally incline the worker to perform in such a way as to make more than the minimum wage. There are nearly a million (910,000) minimum wage workers who have never been married. For married people who still live together, the percentage earning the minimum wage is 684,000. The difference is impressive. (The marital status is unclear for 411,000 minimum wage workers; the number of people over 65 who earn the minimum wage is 111,000.)
Nearly half—46.7 percent—of minimum wage earners are in the food or hospitality business. Government figures show similar percentages for those who are high-school grads (29.7 percent) and those who have not graduated from high schools (28.7). Workers with a college degree fare better—only 7.9 percent earn at the minimum wage level.
President Obama in his State of the Union address dared members of Congress who oppose hiking the minimum wage to try to raise a family on $15,000 a year.
If the president were to familiarize himself with the actual numbers, he would know that there are almost no minimum wage workers in the U.S. who are doing that.