As Congress debated sending a minimum wage increase to President’s Bush desk for signing, ABC’s Betsy Stark promised “A Closer Look” at the issue but delivered anything but.
In her August 2 “World News Tonight” story, Stark stacked the deck in favor of the wage increase, using five sound bites either in favor of an increase or critical of the current $5.15 federal wage floor. What’s more, Stark left viewers with the impression that economists are unanimous in believing the wage hike would have little or no negative impact on the poor.
Stark aimed to knock down that anti-increase argument by consulting economist Bill Cheney of financial service firm John Hancock. “If you go back in time to the earlier occasions when we raised minimum wages, it's clear that you can't find in the data any clear evidence of significant job losses,” Cheney argued.
Lost jobs are just one measure of how minimum wage increases can hurt the poor, and plenty of economists have a view different from Cheney’s, but Stark failed to feature them in her story.
“A survey published in the Winter 2005 Journal of Economic Perspectives, an academic publication, reports that 71 percent of economists at America’s top universities agree with the statement ‘a minimum wage increases unemployment among the young and unskilled,’” wrote The Heritage Foundation’s Tim Kane in a March 4, 2005, research brief.
“About one-third of the economists agree outright, and another third agree with reservations,” Kane added, noting “the consensus among top economists is that the very existence of a minimum wage harms those who, according to its supporters, need it most.”
One such way the minimum wage hurts those who “need it most” is by influencing the psychology of the work ethic on the labor force’s youngest, most inexperienced workers.
In a July 2004 National Bureau of Economic Research paper, economist David Neumark examined the “longer-run effects” of minimum wages on young workers.
“The evidence indicates that even as individuals reach their late 20's, they work less and earn less the longer they were exposed to a higher minimum wage, especially as a teenager,” noted Neumark in the paper’s abstract, adding that “these longer-run effects” have more meaning for policy debates than the short-term pay boost that a minimum wage hike can mean for an employee.
Indeed, contrary to Stark’s bleak view of the American worker’s fortunes, it’s increased productivity that lifts wages, not government mandates.
“Average pay in America has been increasing steadily in recent years, despite the fact that the minimum wage has not changed since 1997,” Heritage’s Kane explained. The “notion that increasing the federal minimum wage will push up real wages is” false, added Kane, pointing to a 7-percent gain in real earnings for workers since 1997 stemming from a 26-percent gain in worker productivity.
Also see Minimum Rage, BMI’s earlier report on media coverage of the minimum wage
