A new editorial in the Tri-City Herald warns readers against the $12 minimum wage legislation recently passed by the Democrat-controlled state House. The problem behind the measure, claims the editorial, is that Washington State is “not business friendly.” Far too often “businesses move operations out of the state because of the poor way we treat the very businesses that drive the economic health of the region.”
Among the arguments presented against the $12 minimum wage, the editorial states that the “minimum wage has never been intended to support a family.” The Tri-City Herald,
“Sure, we want folks to make a decent living and be able to care for themselves and their families. But nobody ever said a minimum-wage job was the solution to economic well-being. It is a means to an end, a starting point, a part-time gig, a job to take on the way to something else or to fit in around classes or semi-retirement.”
The Washington Policy Center’s Erin Shannon agrees. Commenting on the editorial, Shannon points out that the minimum wage was “established by Congress in the Fair Labor Standards Act passed in 1938.” At its start, “policymakers never intended the minimum wage be the sole source of household income or provide “livable” support for a family.” Instead, “the intent was to ensure a reasonable wage for workers who could not command higher pay in the labor market because they had little or no work skills, such as young people just entering the work force.”
But, that’s not all. The Washington Policy Center,
“Accordingly, current data shows that very few workers (3% of the workforce) earn the minimum wage. Of those who do earn the minimum, most are young, are usually enrolled in school and work part time. Very few minimum wage earners are the sole providers for a family. Most older minimum wage earners are secondary earners working part-time to supplement the income of a spouse. It is the combined earnings of two or more earners that typically provides total household income.
“What’s more, two-thirds of minimum wage earners receive a raise within a year. This reflects the fact most minimum wage earners are young or unskilled, and as they develop skills and prove their worth they are rewarded with higher pay. As the Herald puts it, the minimum wage is a “starting point.”
The editorial goes on to discredit a popular argument often made by Democrats promoting the $12 minimum wage measure that, somehow, a higher minimum wage will “stimulate the economy because low-wage earners will have more money.” The Tri-City Herald,
“Clearly, they don’t know business.
“If business owners are forced to accept the $12 rate, they will have to find a way to make it work. This is an unfunded mandate, and that means managers will have to cut something to afford the new wage.
“That could mean fewer employees working more hours. It could mean a business that is just getting by will close its doors. It could mean a valued long-term employee will be less likely to receive a raise because that money was absorbed by the cost of the higher minimum wage for entry-level workers.”
Shannon reminds readers that one only needs to look at what has happened to the former employees of San Francisco’s Borderland Books or Seattle’s Cascade Designs for a real world example of the fact that a higher minimum wage does not stimulate the economy. The Washington Policy Center,
“There is no new stimulation of the economy—the extra money low-wage workers will have to spend from their higher wage is not new money. It was money that was already in the economy, being spent by employers to run their business and pay their employees. Increasing the minimum wage simply redistributes that money so employers have less to spend…
“A higher minimum wage does absolutely nothing for someone who no longer has a job.”