First of all, let’s look at the cost to the employer. In addition to the pay to the employee, the employer must pay the following: Social Security of 6.2%, Medicare of 1.45%, Workers comp Insurance (which differs by state), but in Ma it’s $1.74/hour, Unemployment Insurance, in Ma, 1.87%, sick benefits and medical benefits for a total cost of $21.90/hour. A significant amount and it’s no wonder that McDonalds is replacing 2500 cashiers nationwide (there’s already 500 in Ca) with self-serving Kiosks (http://fortune.com/2016/11/18/mcdonalds-kiosks-table-service/).
Let’s continue and look at some minimum wage statistics and they are as follow from the Bureau of Labor statistics:
-3.3% of workforce at min wage or less
-13.4% in 1979
30% of min wage workers 16-19 (see chart below)
54% < 25
3% women min wage
Highest % in leisure and hospitality 15% (doesn’t take into account tips)
Clearly the number of workers making minimum wage aren’t primary supporters of a household and if you’re a teenager with no education or experience, you’re lucky to be making a minimum wage.
Probably the most damming evidence against a minimum wage comes from an article in the Washington Post (a very liberal newspaper) from a study by the University of Washington (a liberal college)
The findings of the study follow:
-Overall, employers cut their payrolls (layoffs)
-reduced new hiring,
-reduced hours to low-wage workers
-The costs outweighed the benefits by a ratio of three to one
-the study estimates, the average low-wage worker in the city lost $125 a month because of the hike.
The last comment I would like to make is on the mental myopia of a one size fits all minimum wage. As you can see from the below chart, the cost of living varies differently across the United States, for instance, the state of NY has a cost of living 52% greater than Mississippi (higher if you just look at NY City) and having the Federal Government mandate the same minimum wage for both states defies reason. However, at least Congress is consistent in that area.