A response to  “Raising the minimum wage is good for all”

by Ruben Navarrette,  a Jan 5th opinion in major newspapers.

I take exception to Rubens article.  The first thing that caught my eye of discernment was the identification of the person quoted as the expert witness that Ruben uses to justify an increase in the minimum wage.  It was none other than a lawyer and labor consultant, Beth Shulman, who used be an official of a large labor union, the United Food and Commercial Workers Union.  Guess what folks.  Most all union contracts are indexed to the minimum wage laws, among other indexes.  So, when the minimum wage goes up, the union wages go up.  Now this is how Beth gets paid her huge fees, by being an advocate for the passage of legislation to increase the minimum wage.  Do you see self-interest there?  Would you suspect she could not be independent, unbiased and impartially informative?

Now who are these people working at this $5.15 per hour?  Even the big Mac starts their numerous floating employees off higher, as do most employers do now because of competition.  I said floating employees, meaning that their likelihood of being at the same job in a year is very slim; they move on, they quit, they get promoted just for doing a decent job and showing up to work on time, all the time.  These are entry-level positions, and no one is expected to make life long careers as a clerk at Taco Bell. “Skills like how to interact with coworkers and customers have to be learned on the job, and minimum-wage jobs provide inexperienced workers the opportunity to learn these skills.” James Sherk of the Heritage Foundation.  Jan 2, ’07  

Mr. Navarrette could have done some serious research before writing this, and why he did not, I don’t know, but Beth used him.  For the democrats, it’s votes acquisition; it’s support and monies from the unions.  There is some excellent substantial educated research material available on the web for anyone to look into.  Look to the Heritage foundation for one.  www.heritage.org   A Jan 2^nd article at heritage reads: “Minimum wage supporters seek to help poor, disadvantaged workers get ahead, but the minimum wage is not an effective anti-poverty tool. First, it is poorly targeted. It affects the employment of all minimum wage workers, not just the poor. Most minimum wage earners do not come from poor families. A majority are between the ages of 16 and 24, and less than a fifth live below the poverty line.   Suburban teenagers and college students working part time make up a substantial portion of the minimum-wage workforce.”

Another one of Beth Shulman comments quoted by Ruben was about the worth of an hours pay for an hours work.

“It’s not worth $5.15 per hour.”  “It’s not one’s skills (that determine the wage) or even the job itself, it’s whether you have any power to change the working conditions in that job.”  Let that sink in a bit.  It’s not the skills.  It’s not the job.  It’s the power to change.  Right out of a union manual.   First of all, some basic economics are needed to clarify this issue.  The job belongs to the employer, who has his capital investment at stake.  The employee does not own the job, but is a hired agent to do such and such for this amount of money.  The employee will lose nothing by leaving.  The employer can lose everything by not taking care of the product or service and the customers served.

The job is worth the value that the employee adds to the product or service.  And it is the employer, and his/her customers who determine the value of an hours wage.  If customers are willing to pay more, the value of the work increases.  If not, the value of the job goes down considering all else stays the same.  Simple economics.

Go ahead read some of the findings at Heritage and know that the end result of an increase means fewer jobs, fewer opportunities to learn entry-level skills, and more unemployment for those without skills and/or abilities.  It also can change the mix of employees.  Who is hired?  Older less skilled full-time people will get canned, the disadvantaged will get the axe, and more part-time younger workers will be hired to fill those shoes.  Facts, plain and simple. 

The current proposal is to raise the minimum to $7.25 over two years.  A small increase now, another raise next year and the balance the year after that.  Most workers will only see a modest increase in their pay now, the employers will have time to access the results, make adjustments in time for the next increase, and the end result will also see an increase in the price of that product/service for all of us.  Nobody wins.  If $7.25 is good, why not get it up to $9.00 per hour right away.  Or $15.00, then these working poor could really afford that second large screen TV.

Think outside the box with me for a minute.  What would happen if the minimum wage laws were cancelled altogether?  No minimum wage requirement whatsoever.  Zero. Nada.  Zilch.  Let the employer determine the wage completely based on his assessment of the value of a job to him and his customers.  And let the employee negotiate with the employer for an acceptable wage to both of them.  What do you think would happen?  What effect would competition among the restaurants, retailers, and factories have upon the wages?  Oh, the cries would be about suspected coercion between them all.  Don’t believe it.  Someone would break out of the pack quickly, raise the wage and hire all the good workers from the competition getting an edge.  It happens all the time now folks. 

No, a forced raise in the minimum wage is not good for all.  

As I See It Now.