OPINION:
Sen. Tom Harkin and Rep. George Miller’s proposal for a $10.10 minimum wage — a 39 percent increase over the current level — is a recipe for employment disaster (“Democrats propose measure to raise minimum wage,” Web, Tuesday).
It’s not hard to understand why. Businesses that hire entry-level employees and pay them minimum wage — restaurants or grocery stores, for example — keep two cents to three cents in profit from each sales dollar, and they can’t just absorb this increase. Raising prices on cost-conscious customers typically isn’t an option, because sales fall as a result. Businesses are instead forced to provide the same service at a lower cost, which means more self-service and fewer job opportunities for the same people the wage hike is intended to help.
The evidence backs up the intuition: A recent study found that fully 85 percent of the most credible economic studies from the past two decades indicate a loss of job opportunities following a wage hike.
MICHAEL SALTSMAN
Research director
Employment Policies Institute
Washington
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