Home
/
RELIGION & LIBERTY ONLINE
/
How Four States Voted to Hurt Low-Skilled Workers
How Four States Voted to Hurt Low-Skilled Workers
Jan 10, 2026 5:43 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
A Win-Win Solution: The Empirical Evidence on School Choice
A new report by Greg Forster of the Friedman Foundation finds that of all the “gold standard” research on children who utilize school vouchers, 11 of 12 studies conclude all or some of those students achieve better educational es. No study found choice participants were worse off than those remaining in traditional public schools: The evidence points clearly in one direction. Opponents frequently claim school choice does not benefit participants, hurts public schools, costs taxpayers, facilitates segregation, and even undermines...
Bitcoin as ‘Super Fiat’ Currency
Joe has done us all a real service in putting together his three part (1, 2, 3) primer on Bitcoin (full PDF here). I am curious, though, what the justification is for referring to Bitcoin as a modity” currency. Consider this from Izabella Kaminska at the FT Alphaville blog: For those who insist that the term “fiat” refers exclusively to government-issued fiat currency, it’s perhaps better to interpret our use in the evolutionary sense. Meaning that Bitcoin (and other virtual...
What Christians Should Know About Bitcoin (Part 3 of 3)
[Note: This is the third entry in a three part series. You can read the introductory posthereand part two here.] The Disadvantages of Bitcoin For people who are not obsessed with anonymity and are not waiting for the U.S. to return to the gold standard, the reasons for avoiding entering the Bitcoin market are numerous: 1. Convertibility – Whereas other currencies are convertible into other financial instruments (dollars to checks to certificates of deposit, etc.) and through numerous third-party services...
School Vouchers Increase College Attendance for Black Students
New research suggests that school vouchers have a greater impact on whether black students attend college than small class sizes or effective teachers: Matthew M. Chingos of the Brookings Institution and Paul E. Peterson, director of Harvard’s program on education policy and governance, tracked college enrollment information for students who participated in the School Choice Scholarship program, which began in 1997. They were able to get college enrollment information on 2,637 of the 2,666 students in the original cohort. The...
Hostility Against Religion: It’s a Rising Tide
The Pew Forum on Religion & Public Life has been studying the steady rise of hostility towards religious expression and religious liberty worldwide. In fact, they found that restrictions on religion rose in every major area of the world, including the United States, since the study began in 2009. Citing what the Pew Forum calls “social hostilities” (as opposed to government hostilities), the study found that Pakistan, India and Iraq were the most hostile countries to religious freedom. The Social...
Do We Want Prices to Fool Us?
J.C. Penney recently gave up on last year’s strategy to abandon sales and coupons in favor of “everyday low pricing.” As an article in the New York Times points out, “simplifying pricing, it turns out, is not that simple”: “It may be a decent deal to buy that item for $5,” said Ms. Fobes, who runs Penny Pinchin’ Mom, a blog about couponing strategies. “But for someone like me, who’s always looking for a sale or a coupon — seeing...
Think (and Read) before You Blog: A Response to Michael Sean Winters
Over at the National Catholic Reporter, Michael Sean Winters makes ments about my book ing Europe based on a review he had read by Fr. C.J. McCloskey. Here are the most pertinent of his observations: I know that American exceptionalism lives on both the left and the right, but when did the right e so Europhobic? And why? National Catholic Register has a review of a new book by the Acton Institute’s Samuel Gregg entitled ing Europe: Economic Decline, Culture,...
Does the Media Need to Be Schooled in Religion?
Nobody can know everything about everything, but in the age of the internet, fact-checking isn’t too tough. It’s one thing for a high-school student to attempt to slide by on “facts” in a research paper for sophomore social studies, but another when professional journalists make errors about easily investigated pieces of knowledge. Lately, the media has been getting blasted for getting the facts wrong about religion. Carl M. Cannon: The upshot during Holy Week this year was a spate of...
Hipsters and Elitists versus Chain Stores
New York City’s hipster and elitist class seem to believe that they should have some role in determining what business owners do with their property. Like hipsters and elitists around the country, New York’s cohort are banding together to panies that do not present the utopian vision for the neighbors where these elites dwell (most of whom are renters, by the way). There is much buzz in New York City right now because more and more national chains are setting...
Review: Fr. McCloskey on ‘Becoming Europe’
Fr C. John McCloskey, a Church historian and research fellow at the Faith and Reason Institute in Washington, recently reviewed Samuel Gregg’s ing Europe: Economic Decline, Culture, and How America Can Avoid a European Future. He says: Samuel Gregg, director of research at the Acton Institute in Grand Rapids, Mich., has written a very timely book, given the concerning state of our economy and, more importantly, our ever-declining moral life. … ing Europe opens with an account of the human...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved