A minute’s pause for the minimum wage

posted at 8:01 am on March 8, 2013 by Jazz Shaw

The President may not be doing well on the gun grabbing or tax re-hiking fronts, but apparently there’s one area where the nation is still backing up his vision. And that’s the idea of “helping” everyone by jacking up the minimum wage.

A solid majority of Americans support President Obama’s proposal in his most recent State of the Union to increase the minimum wage.

Some 71 percent of those surveyed said they supported raising the federal minimum wage to $9 an hour from $7.25, while 27 percent opposed it, according to a Gallup Poll released Wednesday.

The results attest to the popularity of Obama’s plan, wrote Gallup’s Lydia Saad in the poll’s release.

Not everyone in the country will have to wait to see the results of this debate. Out here in the Empire State, President-In-Waiting Andrew Cuomo has already put the plan into action.

The New York state Assembly voted March 5 to make employers pay 25 percent more to their minimum-wage workers.

The bill boosts the required base hourly pay in New York by an extra $1.75, from $7.25 to $9. The bill would also impose automatic future increases, tied to inflation.

As we all know, anyone who opposes yet another steep jump in the minimum wage to a “living wage” hates poor people, minorities, puppies and unicorns. Allow me to join the elf kicking crowd for a moment by brandishing the one weapon which seems to flummox them entirely… math.

When you raise the minimum wage for people working in the lowest skill level, easiest to qualify for jobs with the greatest possible labor pool, you do – without a doubt – benefit those earning that wage. But as we have repeatedly pointed out, you drive up the labor costs for the primarily smaller business outlets who rely on this labor, offering a disincentive to hire and, quite likely, a cause to let some people go to keep costs down. You also drive up the cost of basic services and products which employers must charge to break even. But that’s not the entire picture I’m asking you to consider today.

Stop for a moment and think about the portion of the labor force who have worked their way up from minimum wage jobs or taken training in the trades and are working at jobs which pay something higher… let’s say in the range of 12 to 15 dollars per hour. Some of you living in the larger cities may scoff at such a wage, but trust me, there are many people living in suburban and rural areas across the nation who still compete for and get by on wages in that range. They have put the time in, worked their way up, learned some skills, and hold positions which pay a fair percentage more than a minimum wage job flipping burgers or whatever else falls in that category.

When you raise the minimum wage by 25% for minimum wage – and skill – jobs overnight, you may indeed be helping the minimum wage worker who manages to keep their job. But as the associated costs rise, all of those people making 12 or 15 dollars an hour do not suddenly get a 25% raise to 16 or or 18.75 per hour. Their costs go up for their daily expenses, but the raise they see – assuming they get one at all in this economy – will be on the order of 5%. They take the hit for the government’s largess. Further, their skills are devalued in comparison to people doing jobs you can get straight out of high school.

Is this the “defense of the middle class” which the President loves to crow about? Because he’s hurting a lot more people than he’s helping. The market sets wages based on demand. When you artificially warp that through government mandate, it will adjust. And the adjustment is not to the benefit of the masses.


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