Politics from the Palouse to Puget Sound

Sunday, December 30, 2007

Minimum Wage is up again

The minimum wage goes up... yet again. This time it is 14 cents, keeping Washington with the highest minimum wage in the nation.

According to a Seattle PI article a Washington State University study made claimed the minimum wage has done very little to hurt the state. The study claims we have only lost a few jobs.

I have to question whether the study only looked at minimum wage workers. Did it take into account the other wage earners who were not minimum wage, but lower paid workers?

For instance I work in a job where I start at minimum wage while I am training. But when my training is done, I get a raise of fifty cents. Now, that the minimum wage is up 14 cents, my fifty cents raise over the new employees is now only 36 cents. In other words my paystep above the beginning workers has been made smaller.

So did it take into account the possible "bumps" in pay that would have to take place to those who are paid above minimum? That will also affect me as an employer. So, it is possible that a raise in minimum wage will also make me, as an employer, raise other wages ultimately costing me more money to operate.

I have to also question the article saying it hasn't hurt the state. Did it do a special study on border towns? Places like Vancouver and Pullman... For a while the business owner will probably just absorb some of the high wages from the business owners' cut of the pie. But at some point he can no longer take those hits and has to raise prices.

With higher prices, the extra money that a minimum wage earner makes will get used in paying for the higher prices. Here is an example from the Seattle PI:
According to a survey conducted by the Washington Restaurant Association, eight years ago, you could get a hamburger, fries and drink at a full-service restaurant for $6.26; now, the average price for that same meal is $14.07. The association says that among the rising costs restaurants face, minimum wage increases are part of the problem.

Speaking of the Seattle PI article, it started out with the story of a 23-year-old woman who has three young kids. She works two minimum wage jobs to try to make ends meet.

I would argue that a better way to make ends meet is to work on obtaining a non-minimum wage job.

I am tired of these emotional anecdotal examples used to argue that the minimum wage needs to increase. Why not profile the 17-year-old who uses his money to buy new stereo components for his car or new video game systems? Doesn't quite have the emotional touch.

Also, don't give me an example that the single mother can't find a good paying job because of this or that. I know of a woman who had three kids when her husband died. She was a meat wrapper at a major chain store. She knew she needed to make more money, so she did something about it. Her option was not to lobby the government to force the business to pay her more.

She worked during the day and went to night school to learn to be a meat cutter. That would provide the money she needed to care for her three children. It was hard on her and her kids, but she did what she had to. The answer is NOT to raise kids on a minimum wage job, but instead to work on obtaining a higher paying job.


Paul E. Zimmerman, M.A. said...

Scotty: "According to a Seattle PI article a Washington State University study made claimed the minimum wage has done very little to hurt the state. The study claims we have only lost a few jobs."

I'd like to see this study, particularly this portion of it. When they find that the state "only lost a few jobs," I wonder if they are simply making a year-to-year tally, or if they go as far as to compare recent past job growth with pre-initiative 688 job growth. I would not be surprised if it turned out that the report attempts to gloss over stagnation in job growth here.

Paul E. Zimmerman, M.A. said...

I found this comment by Dr. Holland, the WSU econ prof behind the study:

"For the economy as a whole, a 5 percent increase in the minimum wage leads to a loss of roughly 2.5 percent of all minimum-wage jobs, but the wage bill goes up, so the remaining 97.5 percent of all minimum-wage workers are better off," Holland said in a WSU news release."

Now I REALLY want to know if job growth in Washington has stagnated post I-688, particularly in the minimum wage category. If it is stagnant, then this means more and more unemployment of real human beings every year, not "just 2.5% of X."