Fox Regular Art Laffer: The Minimum Wage Is Just The "Black Teenage Unemployment Act"January 8, 2014 12:24 PM EST ››› EMILY ARROWOOD
Frequent Fox guest and former Reagan economic advisor Art Laffer argued for the abolishment of the minimum wage for some workers, describing the law as the "black teenage unemployment act." He added that the federal requirement "makes no sense whatsoever."
Laffer, the so-called father of trickle-down economics, appeared on the January 8 edition of Fox News' Happening Now to discuss the possible extension of recently-expired unemployment benefits for the long-term unemployed. When host Jenna Lee asked Laffer and American Enterprise Institute's Michael Strain about other ways to improve the economy, Laffer recommended doing away with the minimum wage for some workers, saying that "honestly" the requirement is the "black teenage unemployment act." Strain agreed, and suggested lowering the minimum wage "for the long-term unemployed" to $4 an hour.
JENNA LEE: One of the things you both agree on is maybe looking at minimum wage, and Art, you have an idea for minimum wage that you think could encourage hiring and it involves state government so what is that plan?
LAFFER: Yeah, well the minimum wage makes no sense whatsoever to me. I mean, honestly, it's just the teenage -- black teenage unemployment act and this is the very groups that we need to have jobs not be put out of work because of the minimum wage so I'm really very much in favor of at least for teenagers getting rid of the minimum wage so we can bring them back into the labor force, get them the skills they need to continue being productive members of our society for years and years. I mean, that's the way I'd go on minimum wage.
STRAIN: I certainly agree with Art that we should lower the minimum wage for teenagers, I also think we should lower the minimum wage for the long-term unemployed. You know, right now, if you're a worker and you apply for a job and you've been unemployed for 7 months, the firm may say 'hey, you know, I wonder if there is something about this person maybe previous firms have seen something that I'm not seeing -- I'm not going to hire them.' And the reason that, well a reason that a firm might feel that way is because the government says that you have to take a $7.25 per hour risk on that worker. So if we lower that down to, say, $4 an hour, then the risk is much less to the firm, firms are going to be more likely to hire these workers. Now, I think if we do that, for workers that are heads of households and that are working full time, we don't want them living in poverty, so, if we're going to lower the minimum wage for those workers then we need to have some sort of a wage subsidy or an expansion of the earned income tax credit or something to make up the difference.
LEE: I'm going to need a calculator.