Newsgroups: alt.politics.clinton,talk.politics.misc,sci.econ
From: mfriedma@uucp (Michael Friedman)
Subject: Re: Minimum wage: balancing job losses vs pay increases
Organization: Oracle Corporation
Date: Wed, 29 Jul 1992 14:22:28 GMT
X-Disclaimer: This message was written by an unauthenticated user
              at Oracle Corporation.  The opinions expressed are those
              of the user and not necessarily those of Oracle.

In article <hellmann.712258228@oak.cs.scarolina.edu> hellmann@cs.scarolina.edu (Douglas R Hellmann) writes:
>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:

>>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.

Evidence please?

>>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?

Read above.  Under 20% (we don't know how many are second- or third-
wage earners in statistically poor households.)

Also, we can calculate that under 800,000 primary wage earners are
making minimum wage in the entire US.

>>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?

If you want.  But it seems kind of pointless.  If you have a job that
requires skill and experience you pay more than minimum wage.  If your
second tier minimum is higher than the premium industry is willing to
pay anyway for experience and skill then people will be classes as
unskilled for longer or there will be attempts to get by with
unskilled people and you will be making promotions and upward mobility
tougher for people on the bottom.


>>____________________________________________________________________
>>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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