I have received several emails wanting to increase the minimum wage. I understand the desire to improve the lives of those in poverty; however, in my opinion, increasing the minimum wage will do more harm than good.
Increasing the minimum wage is based on the assumption that increasing wages will allow the poor to access more goods and services; that poverty is addressed by increasing the ability of the poor to consume. While it may have a short term benefit, the long term consequences are all negative.
The solution to poverty, if one only sees the world through the lens of consumption, is to help the poor increase their consumptive capacity by increasing their access to more goods. One way to do so is to force employers to pay the poor higher wages. This approach is a pretax wealth redistribution arrangement. The government tells the employer how he will spend his income and is in fact a hidden tax increase. However, poverty is caused by lack of production; not lack of consumption. Poverty and its accompanying scarcity is not solved my increasing the ability of the poor to consume. It is solved by increasing the ability of the poor to produce.
Prosperity is a function of productivity. As an employee becomes more skilled and valuable, that employee can demand a higher wage. There are over 1,000 high tech jobs in Idaho, right now, that pay $32 an hour or more. These jobs are not filled because of a lack of skilled employees.
A minimum wage job is not a career. Minimum wage is only supposed to be a temporary, short-term job. Raising the minimum wage will make it harder for the young and the untrained to gain valuable work experience. Also, the director of the Idaho Department of Labor indicated that the market-driven minimum wage in Idaho today is closer to $10.50 and hour.
A second argument to increase the minimum wage is local control – Should the state preempt cities from passing ordinances to increase the minimum wage? I am not sure; however, why should businesses and employers throughout the state have to engage multiple cities to defeat minimum wage ordinances when minimum wage increases does little to improve the lives of the poor. I feel that those that propose increasing the minimum wage are harassing businesses and employers. Is this what cities are suppose to do?
Moving forward with win-win solutions: I do agree with those that want the minimum wage on one point – we both want to help the poor increase their incomes. Increasing the minimum wage is a win-lose approach. A win-win approach should be sought for and is possible.
The third way would include helping those in minimum wage jobs access job training, helping them connect with local employers that need skilled workers, and helping them feel empowered and able to reach their personal goals. A true win-win solution that benefits the minimum wage employee, the employer, and the state economy is to focus on increasing individual productivity.