News Flash: Some Business Owners Want to Price Low-Skilled Workers Out of Jobs

by Don Boudreaux on November 9, 2013

in Media, Seen and Unseen, Work

Here are the opening two paragraphs from a Reuters report ”report” on business-owners’ alleged support for raising the minimum wage in the U.S.:

Business owners applauded President Obama in backing a federal minimum wage increase to at least $10 an hour. “The American Dream needs a minimum wage increase,” said Lew Prince, CEO and co-owner of Vintage Vinyl in St. Louis, the Midwest’s largest independent music store. “The current minimum wage is too low for workers to live on and too low to sustain the consumer demand that businesses need to survive and thrive.”

“We can’t build a strong economy on a minimum wage from 1950, which is equivalent to today’s $7.25 minimum wage, after adjusting for inflation,” said Holly Sklar, Director of Business for a Fair Minimum Wage. “The minimum wage has lost a third of its buying power since 1968, undermining working families, businesses and our economy.”

Here are the opening two paragraphs from a mass e-mail that I received yesterday from Mr. Bob Keener (who is mentioned later in the Reuters “report”); I receive such unsolicited e-mails from Mr. Keener regularly, and have done so for at least two years now:

Business owners applauded President Obama in backing a federal minimum wage increase to at least $10 an hour. “The American Dream needs a minimum wage increase,” said Lew Prince, CEO and co-owner of Vintage Vinyl in St. Louis, the Midwest’s largest independent music store. “The current minimum wage is too low for workers to live on and too low to sustain the consumer demand that businesses need to survive and thrive.”

“We can’t build a strong economy on a minimum wage from 1950, which is equivalent to today’s $7.25 minimum wage, after adjusting for inflation,” said Holly Sklar, Director of Business for a Fair Minimum Wage. “The minimum wage has lost a third of its buying power since 1968, undermining working families, businesses and our economy.”

Notice any similarities?  There are others where these come from.

The e-mail from Mr. Keener is the one to which I responded yesterday evening.

Look, Reuters can post and distribute whatever it wants, but when it sends something out under its name it gives the impression that that something is a report.  It’s true that there’s a fine-font disclaimer at the beginning that Reuters “is not responsible for the content in this press release.”  But I suspect that many (most?) people reading this “report” on Reuters’s site will overlook the fact that it’s a near-verbatim cut-’n'-paste from a press release sent out by a lobbying organization intent to force all low-skilled worker who cannot persuade employers to pay them an hourly wage at least as high as these particular business owners and government think appropriate to remain unemployed.

Put differently, it is a mistake to conclude from this item sent out by Reuters that some new and newsworthy event has occurred to prompt business owners generally (or even these particular business owners) to support a higher minimum wage.

I share the suspicion expressed by David Henderson (on whose post I found this Reuters “report”) that many of these business owners who support raising the minimum wage are owners or managers of firms who stand to profit from a policy that obstructs their competitors’ access to lower-wage workers.  And David also recognizes that this “report” is nothing but a reprinted press release.

UPDATE: Tim Worstall in Forbes.

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