Credit where credit is due: I was inspired to revisit the Minimum Wage issue while listening to California talk show host, Tony Katz, filling in for vacationing Dana Loesch on her radio program. A caller thought he was scoring points against Katz when he said “Every time another increase in the Minimum Wage comes up, the conservatives and Republicans are against it.” – As if to imply they were mean, uncaring, “against the little people” one-percenters!
It was the last segment of the show. I knew I’d never get on air to offer rebuttal… but I smiled, knowing I had the inspiration for my next column!
Liberals love to tout the Minimum Wage, and their own beneficence regarding it. But let’s look under the hood and see the real machinery.
There is no question the Minimum Wage is inflationary. If you raise the floor, the furniture rises with it. Some unions use a multiplier to the Minimum Wage as the base starting point in their salary negotiations. “The Widget Polisher wage rate for an entry-level polisher shall begin no less than 3x Minimum Wage…” And like fuel costs, labor cost is built into virtually everything we buy. When Minimum Wage goes up, expect prices of everything from food to clothing to cleaning products to go up. And who does that hurt most? The guy at or near Minimum Wage who’s least able to absorb HIS cost increases when he has to buy those products!
The Minimum Wage increases unemployment, as businesses which are forced to increase salaries above what the market would dictate will seek to employ as few individuals doing that job at that rate as they can get by with. Why is our teen unemployment rate so high? Because the cost of entry-level labor is above what the market will bear, so business employs as FEW employees in the low value-to-cost ratio category as possible!
The Minimum Wage contributes to overseas outsourcing of labor. When businesses just can’t afford to manufacture stuff in the States, because high labor costs and the costs of Government Regulation have strangled them, they employ labor in Mexico, Asia and the Pacific where they can produce the same products much more cheaply. Like it or not, we ARE in a world-economy, and American Labor – at least at the low end of the skill spectrum – is simply not competitive.
The Minimum Wage also contributes to the illegal immigration problem. Because “undocumented workers” are often willing to work for less than minimum wage, and provide that NECESSARY CHEAP LABOR, there is a labor demand that keeps them employed, and provides incentive to keep them coming. Whether the politicos like it or not, there are jobs that need doing, that just plain aren’t worth over $7!! And there are people willing, at least for a time in their lives, to accept less to do those jobs. Sadly, because of Minimum Wage, those people are Illegal Aliens!
But what about that “heartless” argument? What about those poor people trying to raise families on Minimum Wage?
The fact of the matter is that most Minimum Wage jobs are Entry Level positions geared more toward teens getting the work experience necessary to move up than “career” positions! Rarely does someone who takes a Minimum Wage job still earn Minimum Wage a year later, whether they’re still working in the same place, or leave it to take their experience to another job! Incentives, raises and promotions usually take that employee to a different salary level within that period of time. These are “stepping stone” jobs – to work for a time and pass out of, and to be replaced by another entry level employee. One would have to be exceptionally lazy, uncommonly untrainable, or utterly incompetent to be stuck long term at Minimum Wage! Find someone who’s earned no more than Minimum Wage for more than 2 years, and I’ll show you someone who’s likely not worth what they’re paying him in the first place. No incentive. No drive. Unwilling to learn. Uneducated. Possibly with behavior issues at work or substance abuse issues away from work! Why do I say this? Because just about ANYONE willing to learn, showing drive and incentive, and doing their job competently and respectfully will be earning more within a year! And if the job they’re in won’t advance them in that time, they should seek another! Or seek training in another field!
The fact is that the market is a much better determiner of labor value than are politicians.
There are burger chains that pay ABOVE Minimum Wage for starting burger-flippers. But they have a higher standard – expecting their applicants to be good students, to learn real customer service skills, and to advance… and they wash out kids quickly who don’t measure up.
Agriculture has determined that there are jobs where the labor value just isn’t worth Minimum Wage. The Progressives are willing to overlook the breaches of their precious Minimum Wage law as Illegals take these jobs and work illegally – both by being here without benefit of documentation, and by earning below the so-called Minimum Wage. But because the Left expects votes from these people (and illegal immigration and voting is a topic for another day) they turn a blind eye, and don’t enforce the Minimum Wage law they created! But notice how many people are actually willing to do that unskilled work for that pay level! And notice that even among these Illegals, they work hard, they seek education, and they advance to higher paying jobs… threatening the employment of American Citizens in more desirable and better paying jobs!
If a class of labor could LEGALLY pay less than the current Minimum Wage, there would be AMERICANS willing to work for it! This would help OUR unemployment rate and diminish the incentive for illegal immigration as well!
One could argue that there should be no Minimum Wage at all and we should let every job pay what they can get someone to accept the job for. Purists would demand that. But the Genie’s out of the bottle and the Pandora ’s Box has been opened. Eliminating the Minimum Wage entirely won’t ever happen. But Conservative pragmatists will recognize that we must stand against further increases, and strive to create a class of labor exempt from the law as being “sub-minimum” in value. There ARE jobs that aren’t worth $7+ an hour, but that WOULD BE CREATED AND FILLED if employers could legally pay, say $5 an hour for them!
As a final note, the City of San Franciso recently raised their Minimum Wage to $10 an hour. Keep an eye on that city! In a year they’ll either have 50% more unemployment, 10% fewer population or will have repealed the law!