Minimum Wage
Increases-Raise Unemployment

U.S. DEPARTMENT OF LABOR

August 10,2008Compliance Assistance - Fair Labor Standards Act (FLSA)

Overview

The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.

Covered nonexempt workers are entitled to a minimum wage of not less than $5.85 per hour effective July 24, 2007;

$6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009.

Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.

* FLSA Minimum Wage: The federal minimum wage is $5.85 per hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009.

Many states also have minimum wage laws. In cases where an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher minimum wage. FLSA Overtime: Covered nonexempt employees must receive overtime pay for hours worked over 40 per workweek (any fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods) at a rate not less than one and one-half times the regular rate of pay. There is no limit on the number of hours employees 16 years or older may work in any workweek. The FLSA does not require overtime pay for work on weekends, holidays, or regular days of rest, unless overtime is worked on such days. Hours Worked (PDF): Hours worked ordinarily include all the time during which an employee is required to be on the employer’s premises, on duty, or at a prescribed workplace.

Recordkeeping (PDF): Employers must display an official poster outlining the requirements of the FLSA. Employers must also keep employee time and pay records.

Youth Employment: These provisions are designed to protect the educational opportunities of minors and prohibit their employment in jobs and under conditions detrimental to their health or well-being.

General Guidance

Handy Reference Guide to the FLSA

Fact Sheets

Employment Law Guide: Minimum Wage and Overtime Pay

REAL CLEAR POLITICS

June 24, 2008

The Imitators

By Thomas Sowell

Full article Thomas Sowell RCP

Excerpts:

If anyone suggested that Tiger Woods should try to be more like other golfers, people would question the sanity of whoever made that suggestion.

Why should Tiger Woods try to be more like Phil Mickelson? If Tiger turned around and tried to golf left-handed, like Mickelson, he probably wouldn't be as good as Mickelson, much less as good as he is golfing the way he does right-handed.

Yet there are those who think that the United States should follow policies more like those in Europe, often with no stronger reason than the fact that Europeans follow such policies. For some Americans, it is considered chic to be like Europeans.

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From: The Employment Policies Institute

July 7, 2007

WASHINGTON – In June, African American teen unemployment grew to seven times the national rate, according to the U.S. Labor Department’s monthly jobs report. The Employment Policies Institute (EPI) warned that mandated wage hikes will only worsen this trend.

The article goes on to tell us that the U.S. Labor Department reports that white teen unemployment is at its highest in two years that all teen unemployment has risen to 15.85 and that African American teen unemployment has jumped up to 31.2%.

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Minimum wage increases deprives two groups of jobs.
1. Some of those already working because the workers productivity does not stay up with the employer’s cost.

2. Those who don’t get hired in the first place, usually teens and others, seeking entry level jobs.

Department of Labor data, have shown for decades, that unemployment among teens and minorities has risen in direct proportion to increases in the minimum wage.

David Henderson, a research fellow at the Hoover Institution and co-author of "Making Great Decisions in Business and Life" reports that a comprehensive survey of studies of the minimum wage found that a 10% increase in the minimum wage reduces employment of young workers by 1% to 2%.

Many of these surveys purport that a higher minimum wage even causes some high school students to drop out, and that the new dropouts, replace other dropouts with less skills, further exacerbating the problem.

Paul Samuelson was the first American to win a Nobel Prize in Economics. Mr. Samuelson said: "What good does it do a black youth to know that an employer must pay him $2 an hour if the fact that he must be paid that amount is what keeps him from getting a job?"

Precisely!

Liberals have a “feel good” mentality, which deprives them of reality in much of their thinking. Even where there is harm to intended recipients, liberals often cannot overcome beliefs they cling to, when the full picture presents itself, especially if “it seems” to be good and “seems” to be compassionate.

In the case of the Democratic Party, because it is beholden to unions, it engages in constant class warfare disguised as compassion, knowing that many voters do not pay close attention to the downside of a higher minimum.

The unions are not terribly interested in minimum wage recipients either, but act like they are. The higher the minimum wage, the more unions can fight to push their members wages above the latest increase.

Recently, the New York Times, contradicting itself, called for an increase in the minimum wage.

In January, 1987, the New York Times had said this in an editorial, "There's a virtual consensus among economists that the minimum wage is an idea whose time has passed. Raising the minimum wage by a substantial amount would price working poor people out of the job market."

The Headline was “The Right Minimum Wage: $0.00”

Most of these jobs are entry level jobs, taken mostly by teenagers and young workers, less than 10 % are single parent with children.

They should be treated as a means to enter the workforce, prove your worth to an employer and move up from there.

Workers know they cannot depend on this starting wage to raise a family.

A book in the 1990’s attempted to refute the many studies and volumes of data accumulated over the years.

Mr. Henderson cited a major study and a book by economists David Card, now at the University of California, Berkeley, and Alan Krueger of Princeton. In that 1994 study of the effect of a minimum wage increase in New Jersey, they found higher growth of jobs at fast-food restaurants in New Jersey than in Pennsylvania, whose state government had not increased the minimum wage.

This study convinced a lot of people, including some economists, that the increase in New Jersey had not resulted in job losses.

It was almost comical to see Sen. Edward Kennedy hype this study when he had never before mentioned any economic studies of the minimum wage.

Based on criticism of their data from David Neumark and economist William Wascher of the Federal Reserve Board, Messrs. Card and Krueger moderated their findings, later concluding that fast-food jobs grew no more slowly, rather than more quickly, in New Jersey than in Pennsylvania.

But they never answered a more fundamental criticism, namely that the standard economists' minimum-wage analysis makes no predictions about narrowly defined industries.

Even many who favor increasing the minimum-wage admit it destroy jobs.

Minimum Wage To Government