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Entries in Minimum Wage (2)

Wednesday
Jun292011

Fact Checking Michele Bachmann on Minimum Wage

ABC News(NEW YORK) -- Michele Bachmann has been an official presidential candidate for less than 48 hours and she's already feeling the media heat.

In an interview with ABC's George Stephanopoulos on Tuesday, the Minnesota congresswoman did not back away from her previous stance to eliminate minimum wage in order to "virtually wipe out unemployment."

"I think we need to look at all regulations, whatever -- whatever ones are inhibiting job growth," she said.

When asked if the minimum wage is one of those issues, Bachmann again just responded, "All regulations."

But with unemployment currently at 9.1 percent, could Bachmann's proposal to scrap the minimum wage really help?  The jury is still out among economists.

"[She] is completely wrong," said Heidi Shierholz, a labor market economist at the left-leaning Economic Policy Institute.  "If you decrease the minimum wage, you would not increase employment.  The economic literature is really clear on that point."

But James Sherk, a senior labor and economics policy analyst at the conservative-leaning Heritage Foundation, said Bachmann got it half right.  He gave her a five out of 10 on the truthfulness scale.

"You're not going to wipe out unemployment completely, but there is an element of truth to it," Sherk said.  While large numbers of people do not lose jobs because of hikes in the minimum wage, employers put off hiring people, he said, which delays the age that young people, in particular, enter the workforce.

There are about 4.4 million Americans earning the current minimum wage of $7.25 per hour or less, which is about 3.4 percent of the workforce.  That's almost as many as two years ago, when the minimum wage was only $5.85 per hour.

By Sherk's calculations, for every 10 percent raise in the minimum wage about 2 percent of the people currently earning minimum wage would get laid off.  He argued that when wages are forced up, companies have to decide if the productivity of their employee is worth the higher paycheck.

But Shierholz argued that raising the minimum wage would add jobs to the overall economy because it shifts money from a sector that hoards cash (corporate profits) to a sector that spends it (low-wage workers).  She said that increases would not add minimum wage jobs, but that the added buying power of low-wage workers would stimulate the creation of about 50,000 non-minimum wage jobs for every dollar-per-hour wage increase.

Copyright 2011 ABC News Radio

Monday
Oct042010

GOP Senate Candidate Wants to Abolish Federal Minimum Wage

Photo Courtesy - ABC News(WASHINGTON) -- Alaska GOP Senate candidate Joe Miller now has the solid support of the Republican establishment, but in an exclusive interview with ABC News, he makes it clear he's determined to shake up Washington and the Republican party in a big way.

"We aren't going there to play ball, we're going to make sure things get done," Miller said in a wide-ranging interview with Politico's Mike Allen and ABC's Jonathan Karl. Miller wants to roll back the power and size of the federal government to a degree not seen for 70 years or more.

When asked if there should be a federally mandated minimum wage, something that has existed since Congress passed the Fair Labor Standards Act in 1938, Miller said, "That is clearly up to the states.  The state of Alaska has a minimum wage which is higher than the federal level because our state leaders have made that determination. The minimum level again should be the state's decision."

Furthermore, in response to whether or not there should be a federal minimum wage, Miller said, "There should not be.  That is not within the scope of the powers that are given to the federal government."

Copyright 2010 ABC News Radio







ABC News Radio