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Friday, January 12, 2007
BMI Misleads on Minimum Wage
Topic: NewsBusters

In a Jan. 11 NewsBusters post, Ken Shepherd went after ABC's Charlie Gibson for stating that "millions of Americans have reason tonight to plan on a pay raise" with a proposed increase in the minimum wage. "Only thing is, it's just not true," Shepherd wrote, directing readers to a Jan. 11 MRC Business & Media Institute article in which he explained:

Of course, Gibson’s premise assumed that there are “millions” earning minimum wage, that they earn the same pay for years despite gaining work experience, and that they are dependent on government to improve their lot in life. All of those notions are false.
According to 2005 data from the federal Bureau of Labor Statistics (BLS), there were only 479,000 hourly workers “earning exactly $5.15, the prevailing Federal minimum wage,” while some 1.9 million take in “wages below the minimum.” Those earning less than the minimum for whatever reasons (legal or illegal) would not get a raise with a minimum wage boost.

But Shepherd ignores the people who are making between $5.15 and $7.25 -- all of whom would presumably see some sort of pay raise because of the minimum wage increase. According to the Economic Policy Institute, 5.6 million Americans earn between between the prevailing minimum wage (some states have higher minimum wage than the federal wage) and $7.25, and an additional 7.4 million Americans currently making more than $7.25 are likely to see a "spillover effect" of raised wages because of the higher minimum wage.

So, it looks like Gibson was right after all. 

Posted by Terry K. at 1:10 AM EST

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