Minimum wage boost would hurt more than it would help
Press-Tribune Editorial board
February 14, 2013
Several states have increased their minimum wages recently, including Idaho's neighbors Washington, Oregon, Colorado and Montana. It's a move that has wide support in today's era of hyper Populism, punctuated by President Obama's call for the federal minimum wage to be raised to $9 an hour in his State of the Union address on Tuesday night.
Two bills have been introduced in the Idaho Legislature by Rep. Phylis King, D-Boise, that would increase the minimum wage:
* House Bill 56 would raise the minimum wage for tipped employees from $3.35 an hour to $4.35 in 2014 and an additional $1 per hour each fiscal year until it matches the federal minimum wage.
* House Bill 57 would raise the minimum wage for employees from the current $7.25 per hour to $8.25 and tie annual increases to the Consumer Price Index in future years.
The odds are certainly stacked against both bills in a heavily Republican Legislature. And they should be. Both should be rejected.
Who among us wouldn't like to be paid more for what we do? But every action creates a reaction, and the ripple effects from an increase in the minimum wage create more harm than benefit.
Contrary to what some may believe, most business owners don't have multi-million-dollar accounts in the Caymans where they hoard their wealth to keep it away from what they would consider to be "the riff-raff." After they've paid their taxes, provided benefits, paid their mortgages, paid their utility bills, paid their non-employee-related expenses and met workplace safety requirements, they have to pay their employees.
If they have to pay those workers more, business owners have two choices: 1) raise the prices we all pay to generate the extra money, or 2) cut expenses, which usually means laying off some workers or closing up shop entirely.
Both of those options hurt the economy. The modest increase in pay is wiped out by a higher cost of living, and younger, less-skilled workers have fewer opportunities to find entry-level jobs and begin their ascendency up the ladder.
There is a clear distinction between "minimum wage" and "living wage." The two were never intended to be synonymous. Minimum wage shouldn't be perceived as enough money to live comfortably on - and definitely not enough to support a family on. If it were, it would eliminate the incentive needed to make the sacrifices necessary to gain advanced skills and training.
King's heart is in the right place. But you can't take water from one side of the bucket and expect it not to impact the other side.
* Our view is based on the majority opinions of the Idaho Press-Tribune editorial board. Members of the board are Publisher Matt Davison, Managing Editor Vickie Holbrook, Opinion Editor Phil Bridges and community members Maria Radovich, Mike Fuller, Kenton Lee, Rich Cartney, Megan Harrison and Kelly Gibbons.
The editorial posted here is provided by permission of its original publisher and does not necessarily reflect the views of Idaho Public Television.
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