NITA LOWEY DESTROYS JOBS

Voted YES on increasing minimum wage to $7.25.
(Jan 2007)

Although this may appear to be an economically sound vote in support of the low-skilled worker, it in fact, destroys jobs, eliminates opportunities to learn new skills and wastes resources. With an estimated 300,000 jobs destroyed by this wage increase and unemployment now hovering at 10%, it is time to vote Nita Lowey out of office and look to someone that will eliminate the minimum wage law.

Things Nita Lowey doesn't understand about minimum wage laws:

1. Reduces Future Earnings Unskilled workers use low paying jobs as a training ground to learn the skills they need to advance and increase their future earnings. Since having a job is one of the most important ways to acquire valuable skills, today's minimum wage-induced unemployment translates into tomorrow's reduced earnings.

2. Creates Underemployment Not only does it create unemployment, it also creates underemployment. Even if a higher minimum wage doesn’t manifest itself into lost jobs, it will lead to fewer hours, reduced benefits or both. Some workers who would have received paid training won’t. Employee discounts and other perks might fall.

3. Increases Prices A reduced amount of labor leads to increased prices. Because prices are determined by supply and demand, if less of a product is produced, it will become more scarce resulting in higher prices. If wages were allowed to fall to market level, there would be more jobs, output would be increased making the product less scarce, in turn, lowering the price and increasing everybody's real wage.

(A person's real wage is determined by the strength of the purchasing power of their dollar. For instance, even though you may not have received a raise this year, if prices fall, you're real wage actually went up because you can buy more than you did before. But when prices rise at a higher percentage than your wage does, your real wage actually goes down because your dollar can not buy as much.)

4. Discrimination Over the years, steady hikes in the minimum wage have priced out of the market the most vulnerable workers, including minorities, teenagers, and women with limited skills. The bias of minimum wage laws against disadvantaged minorities has been conspicuous ever since 1956, when the minimum wage shot up from 75 cents to $1.00 an hour. During the next two years, nonwhite teenage unemployment spiraled from 14 to 24 percent.

We must ask ourselves, if minimum wage laws are so bad, why would Nita vote for them?

I'm sure Nita can answer this question herself. You see, Rep. Lowey not only supports minimum wage laws but she is also a big supporter of labor unions.

Labor unions play a critical role in the minimum wage laws. Unions spend millions of dollars a year (a huge waste of valuable capital) lobbying congress to increase the minimum wage in the name of the "greater good."

But by increasing the minimum wage, unions are in fact, pricing unskilled workers out of the market. Where you might have once been able to hire 5 unskilled workers to do one job, it is now cheaper to hire one skilled union worker instead. An obvious example of this is an increase in the amount of self checkout areas in supermarkets. Once there might have been 5 cashiers ringing up customers, but now there is only the cost of one union worker to service the new machines. Sadly the cashier is going the way of the elevator operators and ushers of the 1950s.

No matter how Nita may word it: Unions, laws, and regulations do not increase the standard of living of the ordinary people. The real thing that protects the worker is the existence of alternative employers competing against one another for new workers. People do not look to stay at a minimum wage job. They use them to acquire the skills needed to obtain better jobs elsewhere. If Nita really cared about the workers she would do away with the minimum wage and support the creation of new jobs, by cutting taxes and getting rid of regulations that interfere with the creation of new businesses.

If wage increases were truly the only thing necessary for improved living, than why not push for $100/hr minimum wage?