The Economic Policy Institute (EPI) has come out with a study that demonstrates how the inflation adjusted earnings of low wage workers (defined as “wage-earners at the 20th percentile”) have fallen over the past four years (2009-2013).
The decline in real wages occurred in every state but three (West Virginia, Mississippi, and North Dakota). The study found a national average hourly wage drop of $0.68 (6.4%). This finding led, unsurprisingly, to the EPI author’s support for President Obama’s proposal to raise the minimum wage to $10.10 per hour.
But, declining wages for the poorest paid workers demonstrates that employers are taking advantage of a surplus of those workers. Among that surplus of workers are millions of illegal aliens. A more responsible policy to help the nation’s most economically disadvantaged workers would be to diminish the competition from illegal alien workers by better enforcing the law against employers hiring them.
The EPI and Obama proposal of an increased minimum wage has now been estimated by the Congressional Budget Office as likely to destroy about half a million jobs.
The CBO also found that a minimum wage increase would increase earnings for those who still had jobs. However, besides costing job opportunities when unemployment among low wage workers is already unacceptably high, that action would also benefit those illegal alien workers who are competing with fake or stolen ID for those scarce jobs, and it would also increase the attraction for other aliens to try come in search of those jobs.