Minimum wage increase would harm Tulane community

Kevin Young, Staff Writer

The following is an opinion article, and opinion articles do not reflect the views of The Tulane Hullabaloo.

President Barack Obama, Sen. Mary Landrieu and other Democratic politicians are known for their calls to increase the minimum wage. In Seattle, liberals recently achieved their goal of a $15 minimum wage. Some left-wing pundits want to go even further, demanding a $16 or even $17 minimum wage. The empirical evidence and economic academy is clear, however: increasing the minimum wage would have generally negative effects, especially for the Tulane community.

According to the American Economic Review, 90 percent of economists agree that raising the minimum wage makes it harder for people with low skills to find employment.

Since Tulane students are part of the “low-skilled” category – otherwise they would not be at college – increasing the minimum wage makes it harder for Tulane students to find part-time jobs while they are studying. This concept was best related by Milton Friedman, former University of Chicago economics professor, when he explained that a high minimum wage discriminates against those with low skills, since employers are required to give out high pay.

Getting rid of low-paying jobs has two other important effects. For one, it pushes employers to use more electronic and computer options for business services than they would prefer. In the past, it was common to have low-skilled workers fill cars with gasoline at the pumps, but those positions have disappeared since most employers cannot afford to pay these individuals $7.25 an hour.

The other important effect is that a high minimum wage prevents workers from gaining experience precious to their future career ambitions. If a person has low skills and is worth little salary, then – in a world with a high minimum wage – that person will not be able to gain a job that provides them with experience necessary to move up the socioeconomic ladder, as James Sherk of The Heritage Foundation has previously explained. At Tulane, this could mean fewer paid internships for students in New Orleans and back in their home cities. In fact, some students have gotten so frustrated with having to take unpaid internships that they are suing their employers.

There is no logical argument for increasing the minimum wage. Calls for such a move are nothing more than populist politicians trying to win another election among their lower-income constituents. When Sen. Landrieu calls for a minimum wage, it is nothing more than politics.

There are ways to combat poverty, such as increasing the Earned Income Tax Credit, as Tulane economics professor Keith Finlay has suggested. There is also Milton Friedman’s idea of a negative income tax. Or, as the American Enterprise Institute has written about, there are bottom-up approaches revolving around tax credits and work-for-welfare. None of these avenues, however, suggest that raising the minimum wage would have any positive effects for the U.S. or the Tulane community.

Kevin Young is a sophomore in the Newcomb-Tulane College. He can be reached for comment at [email protected]