Throw a rock in the air, and it falls back down. The law of gravity.
Increase the price of labor by imposing a minimum wage, and jobs -- especially low-paying entry level jobs -- are destroyed. The law of supply and demand.
Last month Arizona raised the minimum wage to $6.75 per hour from $5.15 per hour -- a 31 percent increase.
The results? This headline from the Arizona Republic newspaper tells the story:
Increase the price of labor by imposing a minimum wage, and jobs -- especially low-paying entry level jobs -- are destroyed. The law of supply and demand.
Last month Arizona raised the minimum wage to $6.75 per hour from $5.15 per hour -- a 31 percent increase.
The results? This headline from the Arizona Republic newspaper tells the story:
New Wage Boost Puts Squeeze on Teenage Workers Across Arizona: Employers Are Cutting Back hours, Laying Off Young Staffers.An excerpt from the story:
Some Arizona employers, especially those in the food industry, say payroll budgets have risen so much.... that they're cutting hours, instituting hiring freezes and laying off employees.These anecdotes only affirm what minimum wage critics have been saying for 60 years. A new study by the non-profit Employment Policies Institute (EPI) finds that for every 10% increase in the minimum wage:
Mark Messner, owner of Pepi's Pizza in Phoenix, says he plans to lay off three teenage workers and decrease hours worked by others.
"I've had to go to some of my kids and say, Look, my payroll just increased 13 percent. Sorry, I don't have any hours for you."
Tom Kelly, owner of Mary Coyle Ol' Fashion Ice Cream Parlor in Phoenix, voted for the minimum-wage increase. But he said, "The new law has impacted us quite a bit."
It added about $2,000 per month in expenses. The store, which employs mostly teen workers, has cut back on hours and has not replaced a couple of workers who quit.
Kelly raised the wages of workers who already made above minimum wage to ensure pay scales stayed even. As a result, "we have to be a lot more efficient" and must increase menu prices, he said.
- Minority unemployment increased by 3.9%
- Hispanic unemployment increased by 4.9%
- Minority teen unemployment increased 6.6%
- African American teen unemployment increased by 8.4%
- Low-skilled unemployment (i.e., those lacking a high school diploma) increased by 8%
If a new federal minimum wage goes into effect, look for the same painful results as Arizona is experiencing -- across the nation.
Source: Arizona Republic
http://www.azcentral.com/news/articles/0210biz-teenwork0210.html
http://www.epionline.org/news_detail.cfm?rid=95
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