At a time when the U.S. economic recovery has slowed to a standstill, President Barack Obama's State of the Union speech seemed to come from an alternate universe as he prescribed more tax hikes and costly federal regulations. His call for a 24 percent increase in the minimum wage to $9 an hour would be especially damaging to Michigan.

With youth unemployment at record highs, a hike in the federal minimum wage would only deny more workers the chance to climb the economic ladder.

The president framed the minimum wage debate as a key to giving workers a way into the middle class.

"This single step would raise the incomes of millions of working families," said Obama. But most minimum wage earners are not heads of households but young, unmarried workers. Although workers younger than 25 represent just one-fifth of hourly workers, according to the Bureau of Labor Statistics, they make up more than 50 percent of those making minimum wage - 23 percent of them teens.

Only 10 percent of minimum wage earners are heads of households with children, many of them single mothers whose employment prospects would shrink as a result of the $9 law. Only 3 percent of Michigan workers earn minimum wage.


Hiking the minimum wage discriminates against entry-level workers. The higher it goes, the minimum wage not only raises business costs and reduces the number of available jobs, but also biases the labor force toward workers who already have work experience - or just eliminates jobs altogether. Indeed, that is the secret of the Democrats' rush to embrace $9 an hour - it increases the floor from which their union supporters negotiate higher rates in collective bargaining talks.

Michigan small businesses would be hard hit by a minimum wage hike.

"The minimum wage is a major anti-jobs policy," says Michael Dunkelberg, chief economist of the National Federation of Independent Business. Minimum wage jobs are predominantly in the tourism and food service industries - both important pieces in Michigan's growth.

You only need to go back to the last minimum wage hike to see its negative effects.

In 2007, Congress passed an ill-timed minimum wage bump - a two-year, 40 percent, phased-in increase from $5.15 to $7.25 an hour by 2009.

The result was a plunge in working youth. Teen unemployment today is at its highest levels since records were first kept in 1948 with only 25 percent of 16-19-year-olds working. Black teens in cities like Detroit are already reeling from last year's 42 percent unemployment rate, a significant increase from just a few years ago.

After the last spike in the minimum wage, Dunkelberg claims teen jobs disappeared.

"The facts are indisputable: Minimum wage hikes lead to job losses," says Michael Saltsman, of the Employment Policies Institute.

"This proposal will only harm the people the president wants to help."
