Home
/
RELIGION & LIBERTY ONLINE
/
How Four States Voted to Hurt Low-Skilled Workers
How Four States Voted to Hurt Low-Skilled Workers
Apr 25, 2026 4:53 PM

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
Women of Liberty: Hildegard of Bingen
(March is Women’s History Month. Acton will be highlighting a number of women who have contributed significantly to the issue of liberty during this month.) “This strange child” is how Hildegard was once described. Born in 1098, she was known to have visions, but kept them private for many years. Her family sent her at the age of 8 for religious education. It was not until the age of 42 that she realized the full extent of her visions and...
International Women’s Day: Please Stop “Helping” Us So Much
International Women’s Day has been celebrated on March 8 since 1911, when Clara Zetkin, a member of the Social Democratic Party in Germany, proposed the yearly event that has its roots in women’s suffrage. It is good to remember that women have not always enjoyed the right to vote, the right to work in a safe environment and to earn a fair wage. Indeed, many women around the world still do not enjoy such basic rights. However, the website promoting...
At the Vatican Conclave: The Lull before the Storm
ROME — For all the ‘Vaticanisti’ (journalists specializing in the Vatican) sitting around Rome and interviewing one another for the last several weeks, the wholesale consumption of high blood pressure medication took a precipitous drop on the announcement Friday afternoon that the Conclave to elect the new pope would occur on Tuesday, March 12, one day later than I had predicted several weeks ago. Now is the lull before the storm. A Mass praying for the election of the pope...
Guns and Ammo as a Taxable ‘Sin’
Need to justify a new sin tax or raise an existing one?Adam J. Hoffer,William F. Shughart II, andMichael D. Thomasrecently explained in U.S. News and World Report how it’s done: Claim that consuming some good or engaging in some activity contributes to ill health or harms the environment. Argue that “experts” know what choices consumers should make better than the consumers themselves know. Finally, don’t forget to select items for taxation that only a minority of the population buys, but...
Integrating Faith, Work, and Economics by the Power of the Holy Spirit
Over at the IFWE blog, Art Lindsley continues his series on the gifts of the Spirit, offering seven reasons the gifts of the Holy Spirit matter for our work. “Whether working in creation or regeneration, the Spirit constantly empowers us to carry out the callings God places on our lives,” Lindsley writes. Providing some brief Biblical basis for each, he offers the following reasons: The Spirit gives us power.We shouldn’t separate “natural” and “spiritual” gifts.The Spirit helps us reach our...
Education by and for civil society
If we assume that the institutions of civil society, like churches, recreation centers, fantasy football leagues, and book clubs are essential for a flourishing society, it es very important to determine how such institutions are developed, maintained, and promoted. For thinkers as varied as Alexis de Tocqueville, Abraham Kuyper, and Pope Paul VI, the realm of civil society provides an indispensable area of connection and protection between the individual person and the political order. In Quadragesimo anno, Paul VI writes...
Is the Church Responsible for the Reduction in Crime?
America has a lot big problems—and we American’s like them to have one big cause. We also prefer that they have one big solution (preferably fixable by our big government). Take, for example, violent crime. Since 1992, the population increased from 255 million to 310 million but the violent crime rate fell from 757.7 per to 386.3 per 100,000 people. While in 1994 more than half of Americans considered crime to be the nation’s most important problem, only 2 percent...
Chuck Colson, Compassion, and Criminals
As Joe noted last week, over at Think Christian, H. David Schuringa highlights the primacy of the church’s ministry to prisoners and their families. He points to efforts both great and small: Over the last 20 years, prison ministry has finally gotten back on the church’s agenda. There are not only large, national ministries like Bill Glass Champions for Life, Kairos, Prison Fellowship and Crossroad Bible Institute, all dedicated to preparing inmates for reentry, but also thousands of smaller groups...
Audio: Kishore Jayabalan and Al Kresta Discuss Papal Candidates
Late last week, director of the Acton Institute’s Rome office spoke on Ave Maria’s Al Kresta in the Afternoon. Since the conclave to elect a new pope is set to start on Tues. March 12, Jayabalan and Al Kresta discuss the potential candidates for pope and the mood in Rome. Jayabalan lists some of the qualifications the new pope should possess then suggests Cardinals from around the world who possess the best experience and skills. Some of the Cardinals that...
Ralph Baer and the Art of Innovation
In the video below, Ralph Baer, the “father of video games,” explains why he still invents at 90 years old. “What do you expect me to do?” he asks. He likens invention to the work of a painter. Would someone ask why a painter doesn’t retire? It’s what they love to do! Indeed, it is a calling. In The Entrepreneurial Vocation, Fr. Robert Sirico writes, Entrepreneurs, as agents of change, encourage the economy to adjust to population increases, resource shifts,...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved