Raising the minimum wage: Good idea or bad idea?
On an earlier show, we heard from guests who supported raising the federal minimum wage.
It now stands at $7.25. There’s a proposal in Congress to raise it to $10.10.
Gene Barr, President and CEO of the Pennsylvania Chamber of Business and Industry, which represents businesses in that state, doesn’t think that’s a great idea.
“What we believe is … that the minimum wage increase proposed is not only highly inefficent, but is also even harmful to those people who most need these entry-level jobs,” Barr says. “If you think about it, a much better way trying to help these people, would be for example increasing the Earned Income Tax Credit at the federal side, because in that way we’re all participating a little bit, and trying to make things better for the people who truly need it.”
According to Barr, raising the minimum wage at the federal level wouldn’t help the people who need a raise in wages the most.
“Most people who work minimum wage jobs are part-time, about 80% do not have kids,” he says. “More than half of them are in households where the household income is above $50,000, which is a crucial number because that’s the average take-home [pay] for a small-business person.”
So, if raising the minimum wage isn’t the best plan for building wealth in low-income communities and unexperienced workers, what would be the best method? Barr says the answer lies in education.
“Looking at how we get these people the job skills, the training that they need, in order to advance themselves in. Because in reality, the people who are most hurt by minimum wage are the people trying to get their foot in the door,” Barr says. “We need to do a better job, as a society, of getting these people in the talents, the skills, the abilities so they can get that foot in the door. That’s how we’re going to move things forward.”
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