COOPER VS. COOPER: 'Canary' for economy

http://news.google.com ^ | November 26, 2008 | Mel Cooper Jr.:

[Maelstorm]

The national minimum wage is barely tolerable by small businesses during a robust economy, but raising it in a severely faltering economy is just plain ludicrous. Fewer people working means fewer taxes collected by the government.

Businesses find it harder to expand and compete because they can't afford to hire more expensive entry-level workers. The facts clearly show that for each 10 percent increase in the minimum wage small business hiring declines by .8 to 1.2 percent.

Here's another example. About 4 percent of teen-agers who were unsuccessful in finding a summer job in retail in 2008 have Congress to thank. A bill passed in 2007 increased the hourly minimum wage to $6.55 this year and small businesses reacted by trimming summer hiring, including hours worked. Next year the minimum wage will automatically increase to $7.25 per hour.

But wait -- it gets worse. If the president-elect has his way the minimum wage will increase to $9.50 within two years from the time he takes office. Low-skilled workers and entry-level candidates with minimal skills will certainly cheer the idea of making almost $10 per hour. That is, until they discover how much harder it will be to find those jobs -- even after the economy turns back up.

To his credit President-elect Obama recently announced his goal -- but without any specific plan -- to get 2.5 million people back to work over the next two years. This is an exceptionally ambitious plan considering his campaign pledge to raise the minimum wage to almost $10 per hour during the same two-year period.

[Maelstorm]

This should be required reading for any fool who supports the minimum wage. Right now we are seeing lower levels of hiring directly related to the increase in the minimum wage and it is going to get much worse. A friend of mine commented that 95% of people would see a tax decrease. I responded that their tax cut is likely to come in the form of a pink slip.

People have been so undereducated on how money is made and how the economy is grown. Well they are going to get one hell of an education before all is said and done.