If they get a raise, I do too – right?

Thursday, August 11, 2016
 | 
Chris Woodward (OneNewsNow.com)

minimum wage illustrationIf the federal minimum wage is increased, many Americans already working for a wage higher than that may expect their employer to give them a raise as well – but that's really not how employers typically respond, says an economist with the Manhattan Institute.

According to a Spherion Staffing Services 2016 Emerging Workforce Study, 63 percent of workers believe employers should raise wages for all employees in the event the federal minimum wage is increased.

Right now, the federal minimum wage is $7.25 an hour. While many states and municipalities have higher minimum wages, many individuals, lawmakers, and special-interest groups are in favor of a national minimum wage around $15 an hour. That being said, is it a surprise that so many people making above the minimum wage would expect higher pay?

"That's what a lot of people think: that if they see people who are currently earning low wages getting a raise, they think they deserve one, too," says Jared Meyer, fellow for the Manhattan Institute. "But in reality ... if you raised the minimum wage, you would just hire more skilled people or eliminate those positions. You wouldn't necessarily just give someone who doesn't have skills to justify $15 an hour magically a $15-an-hour wage."

Still, one of the arguments from people in favor of a significant minimum wage increase is that it would stimulate the economy and increase consumer spending, among other things. Meyer disagrees.

Meyer

"That's not how the economy grows," he explains. "It doesn't grow by the total number of wages; it grows by how productive people are. So if you just raise the minimum wage to $15 an hour and ... for some reason [they] keep the same employees who don't become any more productive, you're not going to see economic growth."

If it was that easy to grow the economy by just increasing the minimum wage, Meyer says the minimum wage could be increased to much higher levels.

The Spherion study involved 2,810 U.S. employed adults. It was published recently in USA Today's Snapshot section.

Biased coverage a 'disservice'

Meanwhile, a media watchdog group says coverage about the recent jobs and GDP reports is proof that not all economic reports are treated equally.

Seymour, Julia (MRC)In terms of the July jobs report, Julia Seymour of Media Research Center says it did get coverage from most of the "Big Three" broadcast networks.

"The July report that came out on August 5 was covered that night by ABC World News and CBS Evening News," says Seymour. "NBC Nightly News, I think, was too busy covering the Olympics to talk about that jobs report, which ABC called 'good news' for the economy."

Some center-right economists interviewed by OneNewsNow did find positives in the jobs report. However, Diana Furchtgott-Roth of the Manhattan Institute expresses concerns over a lack of coverage in terms of the types of jobs being created. She adds that it was concerning that more jobs are being added even though the country's GDP rate is slowing down.

Speaking of GDP, Seymour points out that that information for the second quarter was not mentioned by networks.

"They should always cover jobs reports, whether they are good or bad or ugly; but that goes for GDP as well," she says. "The latest GDP report came out [July 29] from the government showing there was only a 1.2-percent annual growth rate for the second quarter – and that entire weekend, the network evening news programs didn't cover it at all and the fact that it was a huge disappointment, according to the Wall Street Journal that weekend."

The government also revised down its estimate of first-quarter growth to 0.8 percent from 1.1 percent.

Seymour contends it's obvious what the networks are doing. "The networks are choosing news that makes the economy – and therefore the administration and other liberals running for political office – look good," she explains. "That's really a disservice to the public."

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