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John Mercure: Mercurey Rising

Raise the Minimum Wage? The Pros and Cons

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It's a debate that rages every couple of years. Should the minimum wage be raised?

I still remember when I was in High School at my first job.  I worked in my hometown's public library and was making minimum wage.  I was $3.35 an hour.  I can still remember my dad's reaction when I complained about how I wish they would raise the minimum wage.  He told me that if they did raise the wage I might not have a job at all, because they might not be able to afford as many employees.  That was in 1984.

Fast forward to 2011.  The minimum wage is $7.25 per hour.  There are once again calls to raise the wage.

Proponents of bumping up the wage argue that the current minimum wage adds up to only $15,080 a year for full time employees.  That's $9000 below the federal poverty level for a family of four.  Jennifer Epps-Addison is the Economic Justice Director of Citizen Action Wisconsin told me, “We’ve created a culture in our society where companies pass the cost of their poverty wages onto American taxpayers. These companies are not hurting. We need to raise the minimum wage so that workers can support their families.”

Brett Healy with the MacIver Institute says the minimum wage was never meant to sustain families.  “It’s a stop gap measure or a foot in the door. Minimum wage jobs were never designed to support families for the long term.”

Healy further argues that raising the minimum wage actually hurts the workforce. “Forcing an increase in the minimum wage will put even more of them out of work and will have a negative ripple effect throughout the economy.” Since 2002 the minimum wage in Wisconsin has increased from $5.15 per hour to $7.25 per hour; meanwhile the unemployment rate for Wisconsin teens has jumped from 15.5% to 19.8%.

 Healy says that is not a coincidence. “If employers are forced to pay a higher hourly wage, they are going to be forced to hire less employees.  There will be less job opportunity for teens and there will be poorer service for all of using businesses that hire minimum wage employees,” Healy claims.

I think this is very simple. The market and the individual employer need to dictate what they pay. I have twin 19 year old daughters. They both came home from college this summer, in part because we thought it would be easier for them to find summer jobs here than back in their empty University towns. They had a hell of a time finding anything.  They both eventually ended up with jobs, but not with the volume of hours they wanted. They are underemployed.  Several employers told my girls that times were tough and they were not hiring as many workers as in years past.  I have to believe that if the minimum wage were artificially raised there would be even less opportunity for college students or other teens.

Let the market bear what the market will bear. Workers being paid $7.25 per hour are better than workers not being paid at all.

 

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