In a recent Fox Business interview, former Dirty Jobs host Mike Rowe explained how raising the minimum wage to $15, or any arbitrarily high number, would actually hurt the poor by cutting off the first rung on the “ladder of success.” Rowe told Fox Business:
I want everybody who works hard and plays fair to prosper. I want everybody to be able to support themselves. But if you just pull the money out of midair you’re going to create other problems, like there is a ladder of success that people climb and some of those jobs that are out there for seven, eight, nine dollars an hour, in my view, they’re simply not intended to be careers. They’re not intended to be full-time jobs. They’re rungs on a ladder. [Those jobs] are ways for people to get experience in the workforce doing a thing that might not necessarily pay you as much as you’d like, but nevertheless serves a real purpose.
At FEE, Brad Polumbo suggests Rowe’s concerns about minimum wage are backed up by the data, writing:
Rowe’s poignant warning is borne out by the statistics.
Advocates of minimum wage hikes often frame their case around hypothetical minimum wage workers who are adult breadwinners with families to feed. But, statistically speaking, that’s not who works in most minimum wage jobs.
According to the Labor Department, only about 1% of people older than 25 and about 1% of full-time workers earn the federal minimum wage. This is in part because many states have higher state-level minimum wages. But even in states that only are bound by the federal minimum wage like South Carolina, only roughly 5% of hourly workers earn the minimum wage, and that’s the highest rate of any state.
While true for some individuals, the narrative of the breadwinning adult minimum wage worker is exaggerated. Indeed, because these jobs are disproportionately worked by young people and part-timers, ample economic research shows that minimum wage hikes disproportionately hurt teenagers and young adults.
This is where Rowe’s warning comes in. The first rung of the labor force ladder is often unglamorous and low-paying, but it’s essential for getting started on the climb.
Action Line: Price controls, whether they be on the cost of labor, housing, or the cost of capital, will always distort the market and leave waste and inefficiency behind. Mike Rowe has pinpointed that in the case of the minimum wage, those being left behind are those who might need a job the most in order to get started on climbing the ladder of success. Click here to subscribe to my free monthly Survive & Thrive letter.
