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When the minimum wage increases July 24, the cost of employing lower-paid workers will jump 12 percent. In addition, the hike — from $5.85 per hour to $6.55 per hour — will make it more difficult for inexperienced workers to land jobs, Clemson University Professor of Economics William Dougan said.

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The minimum wage upsurge arrives via an amendment to the Fair Labor Standards Act (FLSA), signed May 25 by President George W. Bush. The minimum wage will rise again July 24, 2009 to $7.25. That 41 percent increase will mark the largest-ever bump in America’s minimum wage. California, Oregon, Washington and Illinois already offer higher minimum wages of $7.50 per hour or higher.

CLEMSON — When the minimum wage increases July 24, the cost of employing lower-paid workers will jump 12 percent.

In addition, the hike — from $5.85 per hour to $6.55 per hour — will make it more difficult for inexperienced workers to land jobs, Clemson University Professor of Economics William Dougan said.

“Faced with an increase in these labor costs, firms will cut back on their employment of low-wage earners,” he said in an e-mailed response. “There is a range of estimates of the average magnitude of this cutback, but a reasonable estimate is that a 12 percent minimum-wage increase will reduce employment by about two to three percent among young workers, aged 15 to 24.”

In essence, youths losing their jobs would bear the brunt of the wage accretion. However in reality, the minimum wage is a minimum starting wage. A higher minimum wage makes it harder for inexperienced workers to accrue essential experience.

“Overall market forces of supply and demand, as well as individual workers' history of job performance, ultimately determine earnings,” Dougan said.

Some 32 states have already set their minimum hourly wages above the federal level. South Carolina, which doesn’t design its own minimum, is not one of them.

The minimum wage upsurge arrives via an amendment to the Fair Labor Standards Act (FLSA), signed May 25 by President George W. Bush. The minimum wage will rise again July 24, 2009 to $7.25. That 41 percent increase will mark the largest-ever bump in America’s minimum wage. California, Oregon, Washington and Illinois already offer higher minimum wages of $7.50 per hour or higher.

Clemson Associate Professor of Economics Curtis Simon said the impact of the July 24 increase would vary across the Upstate.

“To the extent that average wages are lower in Oconee and Pickens counties than in urban counties — for example, Greenville — the impact will be higher,” Simon said.

However, raising minimum wage is an overrated means to goose low-end earnings, Simon said. Increasing skill level is more effective — “a task much easier said than done.”

Raising minimum wage has little effect on health insurance benefits for low-earners. Laura Bucila, a student of both Simon and Dougan at Clemson, researched minimum wage increases occurring during the ’80s and ’90s.

Following federal surges in 1990-1991 and 1996-1997, Bucila found no sign health insurance coverage dropped across the board for lower-wage workers

But traditionally, health insurance benefits among low-wage workers are an anomaly. Among the 10 percent lowest earners, only 20 percent received benefits in the early-90s, while 23 percent received them in the late-90s.

Bucila also examined state-level minimum wages increases for Oregon (1991), New Jersey (1992), Massachusetts (2000-2001) and Connecticut (2000-2001.

“Again, statistically speaking, the results were not terribly powerful,” Dougan said in the e-mail. “However, they suggest that state-level increases reduced health insurance coverage among low-wage workers by about three to four percent (averaged across the aforementioned states). The estimated effects tended to be larger among younger workers and workers in smaller firms.”