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Wage increase will cause a loss of job opportunities

In a recent Another Voice, Rev. Frank Raines III claims that raising the federal minimum wage to $9.80 an hour will lead to "the creation of 4,700 new jobs." ("Congress has moral obligation to approve increase," Sept. 3 News.) While the reverend's sermons are surely inspiring, his command of economics leaves something to be desired.
Businesses that hire entry-level employees and pay them the minimum wage - think restaurants or grocery stores - keep a few cents in profit from each sales dollar and can't just absorb the cost of a mandated wage hike. When they can't raise prices on cost-conscious customers, they're forced to do more with less; that means more customer self-service and fewer job opportunities for the least-experienced employees.
The research backs this up. According to economists at the University of California-Irvine and the Federal Reserve Board, 85 percent of the most credible studies from the last two decades point to a loss of job opportunities (rather than an increase) following a wage hike.
Michael Saltsman
Research Fellow
Employment Policies Institute