We should work towards equal opportunity (fair outcomes) rather than using government to enforce equal outcomes. Minimum wage activists are pushing an agenda of equality over fairness. I don’t think wages are something state government should be in the business of regulating. It’s not because I don’t care about the minimum wage workers, that couldn’t be further from the truth. Rather, I feel we should be raising workers out of poverty through education and job training rather than by raising the minimum wage.
First for a little background. If you haven’t heard, there is a statewide initiative gathering signatures to raise the minimum wage from $9.47 to $13.50. This would boost Washington to the third highest statewide minimum wage, after only California and New York.
The first assertion I disagree with is that government should ensure workers are paid a fair wage. What is a fair wage? I believe this is determined by negotiations between an employer and their employee. The labor union exists because the employees have grouped together to collectively negotiate. I believe employees should have the option to join unions to help with their negotiations. However, raising the minimum wage isn’t negotiation. It is a demand that that under threat of force from the government everyone will be paid at least $13.50 per hour. One thing not being accounted for is that there is no requirement to have any employees! As technology progresses, the pool of low skill jobs will continue to erode.
Raising the minimum wage isn’t a huge problem when unemployment is low. There are plenty of opportunities for work and little competition, so wages naturally rise. If you haven’t read The Grapes of Wrath by John Steinbeck I’d recommend doing so. This classic piece of literature does a fairly decent job describing the problem. When you have such a large group of people all competing for the same jobs, it becomes much easier for employers to mistreat their workers. You are immediately replaceable after all!
One of the biggest groups to suffer from a high minimum wage during a down economy is the unskilled applicants. If there are plenty of people applying for the job, and you need to get at least $13.50 per hour (plus various taxes and other employment costs) worth of value out of each employee, you’re only going to be able to employee workers with $13.50 per hour skills. This significantly reduces the availability of jobs for those without experience. During the previous recession Washington had the highest statewide minimum wage and was number six for youth unemployment. You can’t gain experience without a job, and if all the jobs require experience you’d be out of luck.
The city of Seattle passed a $15 per hour minimum wage, isn’t it fair that the workers across the state get a raise? Quick, do a cost of living comparison between Spokane and Seattle. Oh right, you’d need to be making $15.99 per hour in Seattle to have the equivalent pay as our current $9.47 minimum wage in Spokane. Setting a high statewide minimum wage doesn’t take cost of living into account. Will Seattle be forced to up their wage to $22.00 if this passes? When does it end?
Using a minimum wage to set equal wages doesn’t work. Not all workers are equal in skill or ability. There is no chance to advance if the minimum is so high that you can’t get into the labor market.
“Well ok, we don’t want our workers to be living in poverty! Shouldn’t we pay them enough so they can live?” Last time I checked, minimum wage was actually enough to rent an apartment, pay utilities, and buy food. Sure, it can’t support a family, but hopefully you won’t be in one of these entry level jobs forever. But that isn’t what we are debating here. If that is really the goal (and I think it is a noble goal to work towards, but I don’t believe it is the role of the government) we should instead be considering a Basic Income.
What do we do instead of a minimum wage? If elected, here are some things I’d be doing to help:
1. Fair education funding. Washington State is unconstitutionally under-funding the poor schools in our state. We must ensure everyone has access to quality education opportunities so they have the skills to compete.
2. Keep the economy growing. As long as demand for labor is high, employees will have the upper hand when it comes to negotiating wages.
3. Implement a youth wage. Washington should mirror federal law by only requiring workers under 20 to be paid 60% of minimum wage for their first 90 days on the job. I would also propose adding a second bracket at 80% of minimum wage for workers under 26. This will enable young, low skill workers to land their first job and prove their value to employers.
I am not against working to raise our poorest citizens out of poverty. I also believe that there are workers being paid minimum wage who deserve more. But I don’t agree that raising the minimum wage statewide will achieve the desired goals. I think the group backing this initiative needs to spend some more time thinking about the unintended consequences and work to identify a solution which addresses the root cause of the problem without such disastrous side effects to inexperienced workers.