Want to hurt workers? Raise the minimum wage
January 22. 2013 5:23PM
Why raise New Hampshire's minimum wage? The cosponsor of a new bill to do that has a novel theory.
In the last session, legislators repealed New Hampshire's minimum wage law, defaulting to the federal minimum of $7.25 per hour. As expected, Democratic members of the House are pushing to reestablish the state minimum at $8 an hour and raise it every two years.
Rep. Timothy Horrigan, D-Durham, a sponsor of that bill (House Bill 127), said, "I think wages in general are too low for working people. We seem to have accepted in the private sector that people doing the actual work, people at the bottom of the ladder, people out in the field, haven't had a pay raise for years. We sort of accept that as a fact of life, and now it's being used against public workers who have been attacked for having the audacity to ask for a pay raise."
This is an extraordinary comment. Horrigan admits that the goal of his bill really is to raise pay for public employees.
What about the private sector? HB 127 would hurt low-wage workers, not help them. Economists David Neumark and William Wascher found in their 2006 National Bureau of Economic Research review of more than 100 minimum wage studies that "the oft-stated assertion that recent research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect.... In addition, among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries."
They also found that "the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups." That is, raising the minimum wage causes even more of the lowest-skilled people not to be hired.
If New Hampshire legislators want to hurt low-skilled workers, they will hardly find a quicker and more effective method than raising the minimum wage.