09.30.2010 0

TimesCheck.com: NYT Should Also Report on Folly of Minimum Wage Laws in U.S. After Exposing S. Africa’s Job Killing Policies

  • On: 10/04/2010 10:10:29
  • In: Economy
  • NYT Should Also Report on Folly of Minimum Wage Laws in U.S. After Exposing S. Africa’s Job Killing Policies

    By Kevin Mooney

    What may be economically unsound is often politically expedient, which helps to explain why government agencies continue to mandate job-killing minimum wage laws. Self-described champions of the poor who advance these policies are rarely called out for their perfidy in the news media, which often sympathizes with intrusive public policy schemes.

    That’s why a front page report appearing in last Monday’s edition of The New York Times is so remarkable. The unemployment crisis in South Africa has become so severe to the point where the harmful effects of minimum wage laws are undeniable.

    The political window dressing surrounding South Africa’s policy unraveled in dramatic fashion on the floor of a Newcastle factory that employed workers for $36 a week, which was $21 below what the government stipulated. The opening paragraphs of the NYT article tells a compelling story.

    “The sheriff arrived at the factory here to shut it down, part of a national enforcement drive against clothing manufacturers who violate the minimum wage, the report says. “But women working on the factory floor — the supposed beneficiaries of the crackdown — clambered atop cutting tables and ironing boards to raise anguished cries against it.

    `Why? Why?’ shouted Nokuthula Masango, 25, after the authorities carted away bolts of gaily colored fabric.

    She made just $36 a week, $21 less than the minimum wage, but needed the meager pay to help support a large extended family that includes her five unemployed siblings and their children.

    The women’s spontaneous protest is just one sign of how acute South Africa’s long-running unemployment crisis has become. With their own industry in ruinous decline, the victim of low-wage competition from China, and too few unskilled jobs being created in South Africa, the women feared being out of work more than getting stuck in poorly paid jobs.”

    From here, the report proceeds to offer up commentary from various economists, academics and government officials who seek to account for dire financial climate. Remarkably, the NYT also acknowledges experts who identify “politically powerful trade unions” as the culprit since they often demand higher wages that do not square with reality.

    The trick here is to have the NYT and other liberal publications report on the job-destroying features of minimum wage laws here in America.

    A great source here would be the “War on the Young Series” that NetRight Daily’s own Adam Bitely has carefully and methodically weaved together. Entry level positions that pay modest hourly rates allow unskilled workers to gain experience and credibility that translate into higher paying positions. Minimum wage workers do not stay in place, they move up. This basic point is often overlooked in media coverage of labor issues, Bitely has explained.

    “The minimum wage increased from $5.15 an hour in 2007 to $7.25 an hour in 2010,” he wrote. That is quite an increase and one that is hard to ignore. This increase has forced many employers of under skilled laborers to reconsider how many they can afford to hire for summer jobs, when most of America’s youth are seeking seasonal employment between college semesters and high school summer breaks.”

    “While the New York Times completely disregarded the minimum wage increase in their recent write-up on teenage unemployment, famed economist Don Boudreaux of George Mason University noted that the Times would probably notice a drop-off in subscriptions if the government mandated a 41% increase in their subscription price. It is wrong to simply allow this increase to go by unnoticed,” Bitely continues.

    Hiking the minimum only serves to acerbate unemployment among the young and low-skilled in the U.S. and overseas. Those public officials who are willing to cut against the grain of elite opinion and dismantle government mandates on business deserve a fair hearing in the press. The report from South Africa shows that NYT is quite capable of exposing the fallout from misguided policies.

    Kevin Mooney is a contributing editor to Americans for Limited Government (ALG) News Bureau and the Executive Editor of TimesCheck.com.

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