From: hellmann@cs.scarolina.edu (Douglas R Hellmann)
Subject: Re: Minimum wage: balancing job losses vs pay increases
Organization: USC  Department of Computer Science
Date: 27 Jul 92 17:30:28 GMT

kenr@orleans.storage.tandem.com (Ken Rose) writes:

>In article <1992Jul24.120629.20856@henson.cc.wwu.edu>, n9020351@henson.cc.wwu.edu (James Douglas Del-Vecchio) writes:
>> king@cogsci.ucsd.EDU (Jonathan King) writes:
>> 
>> >crisp@netcom.com (Richard Crisp) writes:
>> >>Minimum wages have the effect of reducing employment or increasing
>> >>unemployment (state it your preferred way).
>> 
>> >That's one effect.  The other effect is to raise wage levels for those
>> >who are working, which could (say) increase consumption and create new
>> >jobs.  One sentence on the topic is not a useful analysis of the
>> >situation.


>Well, lets not gloss over the loss of entry level jobs & opportunity.

>According to the Congressional Budget Office, hiking the minimum
>wage to $5.05 an hour "could cause the loss of approximately 250,000
>to 500,000 jobs ... especially among teen-agers" (quoted in the
>San Jose Mercury News, May 5, 1988).  The Mercury article goes on to
>say that "President Carter's Minimum Wage Study Commission concluded
>in 1981 that each 10 percent increase in the minimum wage cuts
>teen employment by 1 to 3 percent, as the least-skilledc workers are
>priced out of entry level jobs.  By that analysis, hiking the
>minimum wage to $5.05 would cost 325,000 to 975,000 teenage jobs".

I thought that this was found to be false recently.  They just raised
the the minimum wage to something over $4 (I think) and the job loss
rate didn't follow it anywhere as closely as they thought it would.

>And lets not assume that "most" Americans are forced into working
>for minimum wage. "Only 3.4 percent of the American work force
>now hold jobs that pay the minimum wage or less" (from Newsweek,
>April 17, 1989).  "And of those 3.9 million person, some 80 percent
>are second- or third- wage earners in statistically unpoor 
>households."

Why is it so important for all these teenagers to have jobs?  I mean,
not that I don't want them too, but why is it so important?  The people
we should be worried about are the adults who are trying to feed their
families.  What percent of the people working for minimum wage are in
this group?

>Given that one of the main causes attributed to the LA riots is
>pent-up frustration at lack of opportunity, and that starting at
>a minimum wage job allows unskilled workers to begin to climb the
>economic ladder, I wonder just how much effect pricing teenagers
>out of the job market has in creating the type of frustration
>that led to the riots. 

Maybe there could be two minimum wages?  One for these kids that don't
have real skill or experience, and one for the people that need the
money and are somewhat skilled and experienced?

>____________________________________________________________________
>Ken Rose    (kenr@storage.tandem.com)
>The Usual Disclaimer:  Any opinions expressed above are mine alone, not
>those of my employer (who is kind enough to allow me Usenet access).

Doug Hellmann
hellmann@cs.scarolina.edu
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