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Sunday, January 21, 2007

At minimum, a bad deal

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Many, if not most, laws passed by Congress have had unintended, negative consequences. Raising the minimum wage has been one that has.

Perhaps no other so-called economic reform has been studied more than the impact of the minimum wage on poor-to-low income, unskilled, undereducated, unemployed Americans. The preponderance of these studies has shown time and again that raising the minimum wage does not live up to its promises. It doesn't create employment for those it is supposed to help; it reduces employment. It doesn't help the most vulnerable Americans, especially poor minorities; it worsens their plight.

The Employment Policies Institute, a nonprofit research organization, released a recent study of these unintended consequences here this week. It found that for every 10 percent increase:

Unemployment among minorities rose 3.9 percent.

Joblessness among Hispanics jumped 4.9 percent.

Teenage minority unemployment increased 6.6 percent.

Unemployment among African-American teens climbed 8.4 percent.

Low-skilled unemployment (among high-school dropouts) grew by 8 percent.

David Neumark, a University of California-Irvine economist, who conducted the study, said his findings supported "earlier research which found minimum wages have the largest negative effects on low-skilled employees, such as teens and minority teens."

Nothing is more important to the economic advancement of minority youths than access to entry-level jobs, where they can develop good work habits and learn skills that can prepare them for other career opportunities during their working life.

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