Home
/
RELIGION & LIBERTY ONLINE
/
How Four States Voted to Hurt Low-Skilled Workers
How Four States Voted to Hurt Low-Skilled Workers
Mar 7, 2026 2:30 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
Calvin Coolidge at Acton University
Next week at Acton University I am giving a lecture titled, “Calvin Coolidge and his Foundational Views on Government.” One of the great things about studying Coolidge is that he is extremely accessible. Coolidge noted during his political career that practicing law was valuable for munication skills that promote brevity and clarity in speech. The Coolidge lecture at Acton University will attempt to do likewise. He’s a president that probably would have little trouble with the 140 character limit on...
Video: Rev. Sirico on Papal Economics, Vatican Bank
Acton Institute President and co-founder, Rev. Robert Sirico was recently interviewed on both Bloomberg TV as well as Fox & Friends’ Varney & Co. Sirico spoke with Trish Regan on Bloomberg’s “Street Smart” about financial reform in the Vatican: On Fox, Sirico discussed millennials, Cardinal ments on the free market and the Virginia primary: ...
What Christians Should Know About Money
Note: This is the latest entry in the Acton blog series, “What Christians Should Know About Economics.” For other entries inthe series seethis post. The Term: Money What it Means: In economics, money is a broad term that refers to any financial instrument that can fulfill the functions of money (more on that in a moment). There are three basic ways to exchange goods and services: gifting (e.g., I give you a banana, expecting nothing in return); barter (e.g.,...
Global Religious Hostility Continues To Increase
, Pew Research says this is a global issue. The Americas are the only region not seeing a noted increase. A third (33%) of the 198 countries and territories included in the study had high religious hostilities in 2012, up from 29% in 2011 and 20% as of mid-2007. The sharpest increase was in the Middle East and North Africa, which still is feeling the effects of the 2010-11 political uprisings known as the Arab Spring.There also was a significant...
Illegal To Be Faithful: One-Quarter Of The World Has Blasphemy Laws
Meriam Ibrahim is living under a death sentence. Shackled in a Sudanese prison, with her toddler son and newborn daughter with her, Ibrahim will likely be executed. Her crime: being Christian. A Sudanese high court delivered the sentence when Ibrahim refused to denounce her Christian faith. This may seem like an aberration, an isolated throwback to more barbaric times, but according to Pew Research, one-quarter of the world’s countries have blasphemy and apostasy laws. A new analysis by the Pew...
Got Religion? Bringing Back The Youth
I met Naomi Schaefer, not yet Riley, while she was editor of “In Character” and just about to have her first book “God on the Quad” published. I invited her to be a speaker at a Catholic business conference that I was involved with in southern California. The following week she married Jason Riley. The writing career continues to produce good stuff. And there are three kids now and a house in the burbs. Good stuff all around. Her latest...
Feel-Good Taxation and the Monkey’s Paw
File under allegory: An Austin, Texas, resident whose property tax bill has her “at the breaking point.” As noted by Katherine Mary Ham at HotAir, the resident in question, Gretchen Gardner, deems the $8,500 bill for which she’s on the hook a wee tad cumbersome. “It’s not because I don’t like paying taxes,” she said. “I have voted for every park, every library, all the school improvements, for light rail, for anything that will make this city better. But now...
The Power of Pentecost in Vocation and Globalization
Given the dynamics of the information age and ever-accelerating globalization, humanity faces a variety of new opportunities and challenges when es to creating, collaborating, and consuming alongside those from vastly different contexts. Although Pentecost Sunday has already past, Pentecostal theologian Amos Yong wrotesome related reflectionson this very question, particularly as it relates to Christian vocation.As Yong notes, “location and situatedness matter, and do so across many registers — religious/theological, ideological, socio-economic, political, educational, linguistic, geographical, cultural, ethnic, racial, and experiential.”...
David Brat on Christianity and Capitalism
I had a chance to talk with Michelle Boorstein yesterday about David Brat and a bit of his work that I’ve been able to e familiar with over the past few days. She included some of ments in this piece for the Washington Post, “David Brat’s victory is part of broader rise of religion in economics.” I stressed that Brat’s research program, which in many ways emphasizes the relationship between Christianity and capitalism, has at least two basic features. First,...
Explainer: What’s Going on in Iraq?
What just happened in Iraq? Conflicts in Syria and Iraq have converged into one widening regional insurgency and Iraq risks a full-scale civil war after an al-Qaeda-linked militant group called ISIS quickly seized a large section of the country’s northern region. The group has already taken Mosul, the country’s second largest city, and is within striking distance of Baghdad. Insurgents stripped the main army base in the northern city of Mosul of weapons, released hundreds of prisoners from the city’s...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved