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October 5 2010

IWF in the News: A Minimum Wage Trap?

Sabrina Schaeffer

While it may seem like Joe Miller lacks a sense of political nuance, he raises an important issue: At a time of economic volatility, is more federal intervention going to help? More to the point: Is the federal minimum wage hurting workers more than it's helping them?

When Congress increases the minimum wage it has dramatic effects on both workers and businesses. For starters, it often shifts jobs from low-skill to higher-skill workers, increasing unemployment among those at the very bottom of our socio-economic ladder. What's more, while the wage increase may seem modest from Washington's perspective, the higher cost of labor is often debilitating for companies, who are then forced to lay off workers - even close entire shops, factories, branches - in order to adjust to the new regulations.

That's why Miller's comments should not simply be brushed off as inflammatory political rhetoric. If, in fact, a state believes there should be a minimum wage, it should be up to state legislators who understand the local cost of living - not Congress - to determine what that floor ought to be.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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