Home
/
RELIGION & LIBERTY ONLINE
/
How Four States Voted to Hurt Low-Skilled Workers
How Four States Voted to Hurt Low-Skilled Workers
Jul 2, 2025 8:01 AM

Last night the election results revealed wins for Republicans in almost every state. But in four states where the GOP gained ground — Alaska, Arkansas, Nebraska, and South Dakota — the poor and unskilled suffered a loss.

In each of those states, voters passed ballot measures that will increase the government-mandated minimum wage. Beginning in 2015, the wage in South Dakota will increase to $8.50 an hour. In 2016, Alaska’s wage will be $9.75 an hour and $9 an hour in Nebraska. Arkansas will also raise the wage-floor to $8.50 an hour by 2017.

While the measures passionate — who doesn’t want hard-working people to receive more money? — the effect will be that each of those state will likely see unintended consequences of the action.

Here are four ways the increased minimum wages will hurt low-skilled workers:

1. Minimum wage laws will reduce the number of low-skilled jobs —even in states that didn’t raise the wage — In 1950, there were over 81,000 gas stations and only about200 self-service stations(almost all in California). Self-service stations weren’t popular until the two gas shortages in the 1970s (1973 and 1979) caused higher fuel prices that ledconsumers to look for pricing relief. Almost overnight, full-service stations became all but extinct—taking an entire sector of low-skilled jobs with it.

Rapidly increasing the minimum wage will have the same effect. A small group of employees will see their pay increase while many more would find their jobs pletely, never e back. Because most of the increases won’t occur for 2-3 years, employers have time to find alternatives to the increased cost. One of the most likely changes will be automation in the fast-food industry.

In Europe, McDonalds has ordered7,000 TIOSs (Touch Interface Ordering Systems)to take food orders and payment. In America, Panera Bread willreplace all of their cashierswith wage-free robots in all of their 1,800 nationwide locations by 2016. There is even a burger-making robot that can churn out360 gourmet hamburgers per hour. Increasing wages will encourage corporations to speed up the implementation of automated services. By the time the wages go into effect in Arkansas, there will likely be fewer fast-food jobs available.

But the corporations won’t just use the automation in states with high minimum wages; it’ll be more cost-effective to roll them out nationwide. So the unintended consequences in these four states will affect the labor market for the whole country.

2. Minimum wage laws don’t substantially affect poverty — Most people who support or oppose minimum wage laws and/or increases share mon objective — helping the working poor. Because both sides have noble intentions, the merits of the debate over minimum wage laws and minimum wage increases should be based on empirical evidence that it will actually help, rather than harm, the poor.

Ina piece for the National Center for Policy Analysis, David R. Henderson explains there are two myths about minimum wages and the poor:

Most workers earning at or close to the minimum wage are not the sole earners in a household and most of them are not in poor households. For those two reasons, raising the minimum wage is not a targeted way to help poor people.

Henderson notes that from 2003 to 2007, 28 states raised the minimum wage to a level higher than the federal minimum wage. Using this as a basis for study, San Diego State University economics professor Joseph J. Sabia and Cornell University economics professor Richard V. Burkhauser examined the effects this had on poverty levels in those states. The result shows that there was no difference in poverty levels in those states pared to states with lower minimum wages.

Further, they calculated the effects of a proposed increase in the federal minimum wage to $9.50 on workers then earning $5.70 (or 15 cents less than the minimum in March 2008) to $9.49. They concluded that increasing the minimum wage from $7.25 to $9.50 per hour “will be even more poorly targeted to the working poor than was the last federal increase from $5.15 to $7.25 per hour.”

3.The minimum wage redistributes wealth from the low-skilled poor to the more skilled working poor and middle class— Many supporters of minimum wage increases mistakenly believe that increases in wage rates are transfers of wealth from employers and investors to the workers. But as Anthony Davis explains, the money to pay for the increased wage e from at least one of four places: higher prices for consumers, lower returns to investors, lower prices to suppliers, or a reduced work-force. Empirical research has shown that the primary effect of minimum wage increases is reduced employment, which essentially transfers the wealth (in unearned wages) from the less skilled to the more skilled working poor and middle-class teenagers.

4. Minimum wage increases disproportionality affect African Americans —Employment among African American males between the ages of 16 and 24 isdisproportionately responsive to the minimum wage. A ten percent increase in the minimum wage would reduce employment by 2.5 percent for white males between the ages of 16 and 24, 1.2 percent for Hispanic males between the ages of 16 and 24, and 6.5 percent for African American males between the ages of 16 and 24. Professors Even and Macpherson estimate that in “the 21 states fully affected by the federal minimum wage increases in 2007, 2008, and 2009,” young African Americans lost more jobs as a result of minimum wage hikes than as a result of the macroeconomic consequences of the recession.

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
We should not fear automation
The Cato Institute recently released a fascinating study explaining why fears about job losses via automation may be exaggerated. Many people today fear that our technological innovations, particularly automation, will result in permanent job losses. The fear especially applies to e jobs, which usually act as an entrance into the workforce for young people or others. This data, including new figures from the twentieth century, shows that this may be an historically misplaced fear. According to the study, in the...
The Acton Institute holds top-ranked conference among free-market think tanks: Forbes
As we noted on this blog last month, an independent report has ranked the Acton Institute among the world’s elite think tanks. An analyst at Forbes magazine has narrowed the focus and found that our annual Acton University rated as the highest-rated conference put on by “organizations that favor the free economy.” The University of Pennsylvania released its “2020 Global Go To Think Tank Index Report” on January 28. “[D]espite certain weaknesses,” this publication – produced by James G. McGann,...
The gift of ‘regular old living’: Pixar’s ‘Soul’ on work and vocation
Surrounded by abounding prosperity, we are constantly told to “follow our passions,” to “look deep inside ourselves,” to “find our calling,” to “do what we love and love what we do.” And why shouldn’t we? Freedom is expanding. Opportunity is everywhere. Having mostly escaped the material deprivation of human history, our attentions have quite happily turned toward the meaning of our work, and for those resistant to peting allure of materialism, it is a e shift, to be sure. Yet...
China’s BBC ban is a warning for those who could crack down on ‘fake news’
Shortly after the Capitol riot, Rep. Alexandria Ocasio-Cortez stated, “We’re going to have to figure out how we rein in our media environment so that you can’t just spew disinformation and misinformation.” This week, China put her words into action. It banished the BBC from Chinese airwaves, allegedly because of the global news service’s coverage of the COVID-19 pandemic and Uighur Muslims’ persecution amounted to “disinformation.” The BBC reported on its own silencing: China’s State Film, TV and Radio Administration...
‘Religion & Liberty’ Winter 2021 issue released
The latest edition of the Acton Institute’s flagship journal, Religion & Liberty, has been released. The Winter 2021 issue focuses on the menace of political violence. Politics merce and goodwill unite. That truth has been driven home as politically inspired riots have swept the nation. In our cover story, Ismael Hernandez observes that the underlying ideology driving much of our division “is not drawn from the perspective of black Americans as they collectively reflected on the American experience; this view...
‘Mental torture’? Jimmy Lai denied bail for second time
Early Tuesday morning local time, guards hurried pro-democracy and human rights advocate Jimmy Lai out of his prison transport – handcuffed, arms chained around his waist like a member of a chain gang – and inside the courthouse. Lai’s only apparent consolation came from a copy of Thomas Merton’s Seven Storey Mountain, which his wife and child had given him days earlier. The bestselling spiritual classic instructs: The more you try to avoid suffering, the more you suffer, because smaller...
How Australia regulated the news out of Facebook
Imagine a world where you log into your social media account and find pictures of babies, discussion of ideas, notifications munity groups with which you are involved, updates from family and friends, and cat memes. Curiously absent is any news. This is the world Australian Facebook users have been living in since yesterday, the product of the unintended consequence of government intervention. Writing for the Financial Times, Richard Waters, Hannah Murphy, and Alex Baker give a good overview of these...
New series on Orthodox Christian social thought
At Every Thought Captive, a blog of Ancient Faith Ministries, I’ve been writing a series on Orthodox Christianity and modern Christian social thought. In my first essay, I explore the question, “What is modern Christian social thought?” The plight of the working poor in the nineteenth century came to be called the “Social Question,” and by the end of that century Christian pastors and intellectuals refused to remain silent or continue to pine away for a bygone social order that...
Entrepreneurship in theological perspective: Creative and innovative
What distinguishes something that is truly creative from something that is simply innovative? And how do we value and prioritize one or the other? In a recent study, “Creativity, Innovation, and the Historicity of Entrepreneurship,” Victor Claar and I attempt to disambiguate what we call “creative entrepreneurship” from “innovative entrepreneurship.” We describe creative entrepreneurship (or creativity more generally) as “what human beings do in connection with the fundamental givenness of things.” There are possibilities inherent in the created order on...
Rush Limbaugh, RIP: 6 quotations on socialism, the Founding Fathers, and life
The most popular conservative personality of modern times, Rush Limbaugh, passed away this morning at the age of 70 plications due to lung cancer. While neither an intellectual nor a writer – he did not earn a college degree – his quick wit and pithy turn of municated the message of a free and virtuous society to their largest consistent audience. His widow, Kathryn, announced Limbaugh’s death on his syndicated talk radio show this afternoon. Rush Hudson Limbaugh III was...
Related Classification
Copyright 2023-2025 - www.mreligion.com All Rights Reserved