Raising wages, destroying jobs

by Russell Sykes |  | NY Torch

A forthcoming academic study will provide further evidence that a proposed increase in New York State’s minimum wage will destroy job opportunities for young people.

The study — by Richard Burkhauser of Cornell, Joseph Sabia of San Diego State University and Benjamin Hansen of the University of Oregon — uses the Census Bureau’s Current Population Survey data to document what happened to New Yorkers aged 16 to 29 without a high school diploma when the state raised its hourly minimum wage (from $5.15 to $6.75) between 2004 and 2006.

The findings, to be published in the next issue of Cornell’s Industrial Labor Relations Review: employment rates for the youngest, least experienced and least educated workers were reduced by more than 20 percent.

The Assembly this week passed its bill hiking the minimum wage from $7.25 to $8.50 an hour at the urging of, among others, Assemblyman Keith Wright, a sponsor of the bill.

Ironically, Wright is one of the biggest proponents of helping disconnected youth ages 16-24 in New York State as a sponsor of the Career Pathways Program. He consistently and correctly points out the woefully high rate of youth unemployment, particularly among minorities.

The Assembly bill would only worsen their situation, according to the study.

As a poverty-fighting measure, minimum wage increases are poorly targeted; moreover, as explained here, the generous federal and state Earned Income Tax Credit already add substantially to the incomes of low-income working households.

While the Senate continues to voice concerns and say they will not pass the Assembly Bill, the door may be left ajar to compromise. However, these findings about the negative employment effects of a minimum wage increase on youth are sobering and need to be factored into to any final decision.