During his State of the Union on Tuesday night, President Obama argued that Americans should “raise the federal minimum wage to $9.00 an hour.”
While the line might have riled up his base, the policy would have detrimental economic effects if it is put into practice. A study conducted by the University of California-Irvine and the Federal Reserve Board found that the rate of job loss for less-skilled employees actually increases when the minimum wage is increased.
President Obama also claimed that an increased minimum wage “would raise the incomes of millions of working families,” yet according to the Employment Policies Institute, only 16.5 percent of minimum wage recipients are raising a family. The rest are teenagers living with working parents, adults living alone, or dual-earner married couples.
Another problem with increasing the minimum wage at the federal level is that it wouldn’t take into account the differences in the costs of living from state to state. Washington is one of the few states that actually pegs its minimum wage to inflation; the current minimum wage in the Evergreen State is $9.15 per hour.
It should be noted that the president lowered expectations from his 2008 campaign, where he campaigned to raise minimum wage to $9.50 per hour by 2011.
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