Minimum wage hike ‘feels good’ but gives little benefit

By Jonathan McKane, Special to the BDN
Posted April 01, 2013, at 5:04 p.m.

Raising the minimum wage is easy. For a legislator, all it takes is a simple “yay” vote, and the job is done. Sadly, raising the average wage is much more difficult. That requires building a stronger economy — which means, at the very least, hard work and difficult decisions by lawmakers.

But controlling Democratic legislators at both the state and federal level are keenly focused on raising the minimum wage.

Raising the minimum wage is quintessential “feel-good” legislation. Democrats are even calling it a moral issue. It gives a legislator the feeling he or she has actually done something good and positive without having done a darned thing.

It doesn’t require an examination of our economic environment or an analysis of burdensome regulations on businesses. There’s no need to work on lower energy costs or health insurance costs. In fact, there’s no need to pay any attention to the actual businesses that pay the wages. It’s about emotions and that feeling of believing one is “helping the little guy.”

The results of this forced wage increase, however, paint a troubling picture — small businesses must give their least valuable, least educated, least trained or least experienced workers a raise — and that raise comes at the expense of every other business expense, including giving raises to those who both need and deserve them.

The percentage of workers in Maine who actually earn at the minimum wage is less than one in 100 (0.8 percent), according to the Bureau of Labor Statistics. Another 2.1 percent earn less than the minimum wage such as farm laborers. Some of them might be affected by the minimum wage hike, but many would not.

According to the Heritage Foundation, less than 5 percent of those earning the minimum wage are single parents supporting a child. The majority of minimum wage earners are either teens living at home, empty-nest spouses, retirees or others who were not solely dependent on it. And that “little guy” really doesn’t benefit much because unemployment goes up as well as the price of just about everything with this forced wage increase.

Teen employment is especially hard hit with a minimum wage hike, according to a report produced by the Idaho Freedom Foundation and data from states that have forced the wage increase. An increase in teen unemployment means fewer starter jobs, apprentice jobs, after-school and summer jobs. These are jobs where a first-time worker learns some of the most basic, necessary and fundamental skills — showing up on time every day, working as a team and individually, working with basic tools, personal safety and any number of menial but necessary skills that will be called on for a lifetime.

Raising the minimum wage is best done the hard way — without a government decree. The minimum wage — and all wages — can really only be raised with a strong economy.

The last time Maine had a really strong economy was in the late 1990s. At the time, Maine’s minimum wage was $5.15 per hour, but few businesses were actually paying it. Job vacancies went unfilled, and even McDonald’s was advertising starting pay at $10 per hour. Maine newspapers were full of help wanted ads, and the unemployment rate for Maine dipped below 3 percent, which is statistically full employment.

That is the kind of economic environment that helps all – and it doesn’t happen with the push of a button or the stroke of a pen. It requires hard work and legislators at both the state and federal level who are capable and willing to make the tough decisions. It requires listening to the business community and not the demands of organized labor. It takes a long-term commitment to creating a nurturing business environment and not a welfare haven.

As morally satisfying as it may be to force this dangerous wage hike on Maine employers, legislators need to be aware of the many downsides of their “feel-good” actions.

Jonathan McKane served in the Maine Legislature from 2004 to 2012. He is an electrical contractor.

http://bangordailynews.com/2013/04/01/opinion/minimum-wage-hike-feels-good-but-gives-little-benefit/ printed on August 30, 2014