In discussions regarding the Minimum wage, the left is always marching out stories of single mothers living paycheck to paycheck. That such women likely represent .000001 percent of the workforce is likely why rarely actual human beings are used as props, as opposed to theoretical situations. The truth is, minimum wage is a starting salary for those who, as of yet, lack skills to advance beyond it; at least in the field in which they are employed. Few jobs exist that do not quickly move people up the ladder as they improve their abilities. The extremely few jobs that start and dead end at the bottom are transnational in nature, mere stepping stones for what’s next. Of course this is reality, a plane many on the left are unfamiliar with.
Additionally, the wages of mankind are neither set by employers nor workers, something even Marx acknowledged. With the exception of government interference and union blackmail, wages are set by market forces no one controls. Even when non-market mechanisms get involved (government and unions), the wages being called for are balanced out in other ways. Many union trades for example, often go to extraordinary lengths to guarantee the skill levels of their membership is very high. Even so, companies have to compensate by lowering employment via machines, new procedures, or even farming out. The minimum wage, like union wages, have similar effects. The higher cost of labor means both higher skill sets are looked for, and substitutions for the higher cost labor are sought out. This is bad news for those in society most in need of job experience, and with lower qualifications (often one in the same).
In one real life example, during the waning part of the 1970s one of the few holdouts in the self-serve station trend was watching the Michigan legislature intently. The Triangle Market was known for hiring kids to pump gas, something the owner enjoyed being able to do. Repeatedly he warned, if the wages are forced up, “I will have to go self-serve.” The wages went up, and as he had warned he was forced to fire the kids. Nearby, and over a decade later, one of the last golf courses to use teens to cut grass stopped for the same reason. This was followed by grocery baggers at the local grocer, and the list goes on.
This is not a new issue, the first lawsuits to stop the implementation of a minimum wage were filed not by employers, but employees! Better educated, economically speaking, than people today, they knew their jobs were on the line if the progressives of the time got their way. Of course they eventually did, but by that time the Great Depression meant the effects of the wage related job losses were absorbed into the general conditions of the time.
As one would assume, small increases have small effects, and may even have no real effect at all. In recent times, the minimum wage has often lagged behind market wages, making wage hikes insignificant. As wages increases become more substantial, so does the damage. This is not just speculation or even common sense, but a fact proven out by study after study. Nonetheless, today’s crackpot liberals have insisted not only on radical raises in the minimum wage, but a guaranteed “living wage.”
As Forest Gump said, “stupid is as stupid does.” In this case, ignoring the piles of data, and common sense, Seattle raised its minimum wage to stupid levels. At first the evidence was purely empirical. Restaurant closures increased, but the wage hike was mostly seen as a contributing factor, and not necessarily a leading one. Correspondingly, employment levels at restaurants declined for the first time in many years. Now, the evidence is not just the empirical musings of those rooted in economic reality, but real studies are showing the results as well.
One recent study concluded that the average minimum wage earner $1,500 less per year. Now, as the study points out, these numbers do not tell the whole story. The losses are concentrated, in other words, there are those who earned more due to the rise in minimum wage, while those that lost tended to do much worse than the average would imply. For those who are tempted to say this was biased nonsense, it was the City of Seattle itself that commissioned the study; given them the distinction of having documented their own stupidity.
Now of course Seattle is not alone, Minneapolis is following suit. Like a lemming willing to follow others over a cliff, the city is seeking to follow Seattle’s success. Given Minneapolis’s lower cost of living and median wages, the impact is likely to be even more dramatic. The result will be an even more significant shafting of those at the bottom. On the other hand, liberal elites, and their economically ignorant followers, will likely pat themselves on the back for the damage they’ve done.
Arizona is doing the same mistake, but on a much grander scale. Driving out of business small entrepreneurships, and removing segments of the populous from the job market, their graduated increases are certainly going to end badly for many. One of the wage increases most vocal critics has been Goodwill. A company who employs many who would otherwise not have jobs, they see the impact as disproportionately hurting the most vulnerable. They employ as many as their budgets will allow, which in the future will be substantially less than it is now. People who will no longer be gaining the skills needed to move on in life.
The reality is, those making minimum wage represent a very small part of the work force. Despite the single mom raising two kids scenario, the vast majority of minimum wage earners are kids and seniors looking for extra cash, people entering the workforce for the first time or after a long hiatus (mothers, convicts, handicapped etc), and even recent immigrants with no verifiable work history. For the vast majority, this wage is a transitory one. In fact, many of the most successful people in the world started life at minimum wage. Unfortunately, many of those, if starting out today, would be denied getting on the ladder to success in the first place.
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