From today's WSJ: Congress recently raised the federal minimum wage to $7.25 an hour by 2009, in the name of helping low-income families escape poverty. But a sobering new report from the New York City-based Center for an Urban Future shows how minimum-wage laws are already hurting the unskilled and inexperienced.

The "Summer Help" study assesses New York City's publicly funded Summer Youth Employment Program, which each year matches tens of thousands of young people between the ages of 14 and 21 with employers ranging from the local library to investment banks.

Today, however, the New York program serves 20% fewer young adults than it did in 1999, and last year it turned away 30,000 mostly black and Latino applicants. The report cites minimum wage-increases in the Empire State -- one of 30 states that mandates a minimum higher than the federal floor -- as a factor in the program's decline.

The harm from minimum-wage laws is well-documented, and even government job programs aren't immune. As an antipoverty measure, these laws are inefficient because most people who are poor already earn more than the minimum, and most who do earn the minimum aren't living in poverty. They are retirees, homemakers, part-time workers, and teenagers in the Big Apple -- fewer of whom will have summer jobs in the future thanks to the higher minimum wage.

7/4/2007 9:11:42 AM

^ I do want to point out that is based in NYC, which while a huge city and good testing grounds, the demographics of who is poor and who isn't DO change based on location/type of area.

This may be perfectly true for NYC or another large city, but I highly suspect the effects will be different in other areas.

7/4/2007 10:08:06 AM

^ not really. Minimum wage jobs are minimum wage precisely because they aren't worth anything more. This isn't to say that the people working them do not have worth, or that people shouldn't be given an opportunity to do better, but their value to the employer is marginal at best.

When the value of the job is less than the minimum wage that can be payed, a company will find ways of eliminating the job. Actually, with its relatively high cost of living and elastic pricing, NYC would probably be better suited to absorb a minimum wage increase than somewhere in rural Idaho where the economy is relatively closed and prices are inelastic.

7/4/2007 10:13:24 AM

it's pretty much minimum wage because anyone with 2 hands and a brain can do the job. like working at a movie theater serving concessions for example. you could basically just have like a candy and popcorn and drink vending machine and it would do just about the same level of productivity.

7/5/2007 12:00:50 PM

exactly - but no one would pump 8 bucks into a coke machine, so you gotta have someone smile at you before you fork over the loot

7/5/2007 2:40:02 PM

The cost of unlimited soda refills is cheaper than paying someone to serve the drinks.

7/5/2007 2:44:46 PM

i'm sorry, i dont have the numbers in front of me on how much unlimited soda is served!!!1

7/5/2007 2:48:48 PM

^ And whats the deal with unlimited refills? Am I supposed to actually finish the 64 oz of Cherry Coke that I get with my twizzlers?

[/seinfeld]

7/5/2007 2:52:27 PM

Quote :

"you could basically just have like a candy and popcorn and drink vending machine and it would do just about the same level of productivity"

let me know when you create a machine that can pop popcorn. And when it costs like $400,000 I'm sure people will buy it.

Not to mention that more movie theaters are serving a variety of foods and drinks now that have to be created, an example being Galaxy Cinema serving lattes, mochas, espressos, etc. We're basically Baristas who work for movie theater pay.

Oh, and cleaning up after everyone a bit of work also.

7/5/2007 3:11:41 PM

"let me know when you create a machine that can pop popcorn. And when it costs like $400,000 I'm sure people will buy it."

You serious?

7/5/2007 3:43:04 PM

not to mention that movie theaters are on their way out, with the recent advances in DVDs, Netflix, Pay-Per-View / OnDemand, Video iPods, torrents, newsgroups, etc

7/5/2007 3:58:34 PM

Theater's are on their way out because they refuse to modernize. There's like what, 2 Imax theater's in NC? Higher resolution digital screen's aren't common and sound systems haven't really changed in theaters since THX (for the most part). The only 'upgrade' I have seen theaters do is Stadium seating which helps with comfort but not viewing pleasure.

I mean, if people are getting huge TV's with surround sound in their homes and HDTV and blu-ray etc. are becoming commonplace then what is the advantage of watching the movie in a huge crowded theater? Innovate!

7/5/2007 4:06:21 PM

i saw a movie at a theatre with a dlp projector

then went to a theatre without it

i dont want to see a movie unless im sure that it will have a dlp projector

the difference is unreal

the screen is even: brightness, colors, etc

7/5/2007 5:59:59 PM

They definitely have machines that can pop popcorn and dispense it automatically, I've seen them, they even put differing amounts of seasoning and butter on the popcorn for you and serve different sizes. I don't think they cost as much as a 3 bedroom house in a good area, as you suggest they would.



[Edited on July 5, 2007 at 6:10 PM. Reason : ..]

7/5/2007 6:10:08 PM

^LOL. Yeah, I have one machine in my house that can pop popcorn. It cost about 40 bucks.

7/5/2007 6:17:45 PM

^ Sure you do... ...next thing you'll be telling everyone you can have movies sent to your house through the mail...

7/5/2007 6:58:05 PM

you guys might shit yourself when you hear this. But my house has water pumped to it, thats safe to drink. You suckers enjoy your bottled water, my house has evolved.

7/5/2007 7:12:30 PM

i bought my mom a popcorn popper for christmas...it was like 22 i think at walmart

7/5/2007 7:33:20 PM

The federal minimum wage went up on July 1 and hardly anyone noticed. And why should they have? The federal minimum had been stuck at $5.15 since 1997, while average hourly wages had risen nearly 40%. Even entry wages at McDonald's had crept above $7 in the decade of legislative inaction. So the bump from $5.15 to $5.85 was largely a nonevent.

The insignificance of the latest wage hike is surprising in view of the intensity of the political debates that preceded it. Liberal Democrats had proclaimed that two million workers would benefit directly from a federal wage hike and millions more would benefit from bumping up the entire wage scale. Republicans warned that a legislated wage hike would cause a labor-market apocalypse, destroying the very entry-level jobs that low-income workers so desperately need to get a toehold on economic security.

The debate was always more about political posturing than economic reality. An "effective" wage hike must actually raise someone's wages. With labor-market wages already significantly above $5.85, this "hike" was largely ineffective.

But what about those two million workers the Democrats said would get a pay boost from the legislated wage increase? It turns out that the U.S. Labor Department found only 479,000 workers earning $5.15 an hour in 2005. Those minimum wage workers represented only 0.35% of the 140 million-worker labor force. And that was two years ago. Today the labor force is larger and the number of minimum wage workers smaller.

The other 1.4 million workers cited by the Democrats were actually earning less than $5.15 in 2005. Neither they nor their employers were breaking the law, however. That's because, contrary to a popular impression, the federal minimum doesn't apply to everyone.

The Fair Labor Standards Act contains a long list of exemptions, including tipped employees, seasonal recreation workers, charitable organizations, mom-and-pop businesses, farm workers and Samoan laborers. And as the U.S. Supreme Court recently affirmed, homecare workers are also exempt. None of these workers got a pay raise thanks to the new minimum wage law.

This huge "uncovered" (exempt) segment of the labor force not only restrains the wage impacts that Democrats promise but also obscures the disemployment effects that Republicans project. A worker displaced by a legislated wage hike at McDonald's can take a waiter or busboy job in a sit-down restaurant. In the process, uncovered employment becomes a substitute for increased unemployment. The "beneficiary" of the legislated wage hike may actually experience a wage decline in the process.

As a result, the true displacement effects of an effective minimum wage hike are not easily observed, much less measured. This phenomenon will become increasingly important as the second (July 1, 2008) and third (July 1, 2009) steps of legislated wage hikes creep into the "effective" range. Even then (July 1, 2009), however, a federal minimum of $7.25 will still not be very effective.

It's no wonder, then, that few workers noticed, much less celebrated last week's hike in the minimum wage. The only people celebrating are the politicians who are already proclaiming how they helped the poor, low-income worker.

Mr. Schiller is professor of economics at American University and the author of "The Economics of Poverty and Discrimination" (Prentice-Hall, 10th edition, 2007).
http://online.wsj.com/article/SB118411810158562865.html?mod=googlenews_wsj

7/11/2007 3:07:28 PM

I wish I could find the article, but I read recently where less than half of teenagers in the United States this summer were looking for work. This is the first time this has has ever happened. Possible explanations were a) minimum wage, b) wage suppression by illegal immigrants, and c) they simply don't need to work because parents are more willing to provide for material wants. If anyone can dig this up it was a pretty good read.

7/11/2007 3:20:37 PM

^d) teenagers are lazy.

7/11/2007 3:41:43 PM

^ agreed. I couldn't get my younger brother to find a job if his life depended on it. I made him get 3 different applications, and he hasn't turned in one.

7/11/2007 3:52:58 PM

that really just ties in with me c). if daddy is gonna pay for it all, why should I work?

7/11/2007 7:00:45 PM