CNSNews.com - Higher Minimum Wage May Stifle Employment, Group Warns

CNSNews.com - Higher Minimum Wage May Stifle Employment, Group Warns

I want hard working Americans to remember Pelosi in the future as well. Watch and see how prices now skyrocket because of this.

(CNSNews.com) – The minimum wage goes up 70 cents to $7.25 an hour on Friday. This is the third and final boost mandated by legislation that Congress passed in 2007.

House Speaker Nancy Pelosi wants “hardworking Americans” to remember that it was Democrats who made a higher minimum wage their first order of business when they took control of the House two years ago.


“As the final step of the minimum wage increase goes into effect, studies have shown we are also stimulating the economy by giving hardworking Americans the income they need to buy groceries, fill up their gas tanks, and get their children ready to head back-to school,” Pelosi said in a news release on Thursday.

Pelosi says the higher minimum wage has meant “real progress for America.” But as the Washington Post noted, the purchasing power of a minimum-wage worker is 18 percent below what it was in 1968, economists say.

Free-market advocates say the higher minimum wage, far from stimulating the economy, will further stifle economic growth.

"Small business owners are struggling to keep their doors open in this economy," said Terry Neese with the National Center for Policy Analysis (NCPA). "When the federal minimum wage rises (Friday), small business owners will be paying 40.8 percent more per hour than they were paying in January 2007. Unemployment was 4.6 percent then; today it is 9.5 percent and the health care bill will make it go even higher."

A higher minimum wage combined with the Democrats’ health care reform could prove to be a double whammy, NCPA says:

"If the proposed health care bill passes and employers are forced to pay a penalty if they don't provide health insurance, it will adversely impact employment growth," said NCPA Senior Policy Analyst Pamela Villarreal. "If employers are required to pay a higher minimum wage and required to pay for health insurance, they will be less likely to hire anybody."

When the minimum wage increases, the first thing that employers do is cut benefits or raise prices, Villarreal said.

In cases where an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher minimum wage, the Labor Department says.