Reduce Washington state's minimum wage
In 1976, a famous survey was reported in J. R. Kearl, Clayne L. Pope, Gordon C. Whiting, and Larry T. Wimmer, "A Confusion of Economists?" American Economic Review 69 (May 1979): 28-37
A minimum wage increases unemployment among young and unskilled workers.
Of 211 economists who responded, 90 percent agreed, or agreed with provisions, with this statement.
HT: David R. Henderson
Today, the following editorial by Henry D. Johnston appeared in today's edition of the Moscow-Pullman Daily News. It follows the scholarly research.
For the first time in nearly 10 years, Washington will not be increasing the state's minimum wage Jan. 1. The news was met with a sigh of relief from small business owners who are already cash-strapped in their operations, faced with a slowed economy and higher expenses.
With the national unemployment rate creeping over 10 percent and Washington coming up behind it at 9.1 percent, I can't help but think that maybe it's time Washington revisit the minimum wage and give small businesses a break.
My store is teetering on the edge of needing to hire one more person to help out with "back-end" store operations during the hopefully busy holiday selling season. The tasks prescribed would include cleaning the store and stocking shelves while also learning about our business and hopefully becoming a part of our sales staff after the holiday season is over.
My ideal candidate for this position would be a high school student looking for an after-school job. And while I do believe that people should be compensated for hard work and responsibility, Washington doesn't allow for a reduced wage for younger, entry-level workers except those 14 and 15 years old.
I like to believe that I still embrace the old values of hard work and responsibility that my grandfather taught me and would love to teach those skills to younger workers and help them start their working lives with a solid employment reference. However, I find it hard to justify $8.55 an hour for someone on their first job, especially considering that I'm only able to pay my most senior sales associate just more than 50 cents per hour over minimum wage.
As I look back on my work history, it doesn't matter that my first job was at KPND-FM in Sandpoint or my fourth job was at Precision Engraving in Moscow. What matters is that each of those businesses gave me a chance, and I wouldn't be where I am now if they hadn't given me the opportunity to succeed.
It really bothers me that I have to decide between making a sound fiscal business decision by hiring an employee with some work history or being able to provide an opportunity to a young worker similar to what I was given when I was the same age.
So how is the problem corrected?
It's not an easy answer nor is it a popular course of action for Washington's Legislature, but the simple fact remains that Washington must make changes to the minimum wage law.
An immediate cut to bring the minimum wage down to $7.50 for employees older than 18 and require the federal minimum for younger employees in the 14 to 17 age bracket would be a good place to start. Employees older than 18 who have been with an employer more than three months need to be grandfathered so they don't take a pay hit, but employers should have the option to reduce the pay of their new and entry-level staffers.
The argument will be made that business owners are inherently greedy and that even if labor costs drop, they'll still charge the same prices for their products and services. While that may be true in some cases, when did it become a crime for a small business owner to turn a profit?
As much as I'd like to see a plan like mine succeed, I know that it will never gain traction in the Washington Legislature. The bleeding-heart liberals of Washington's west side ignore the simple economics of a higher minimum wage creating a higher cost of operation for businesses. Those higher operating costs are passed onto consumers who are often making, surprise, minimum wage.
Eventually this insane circular process will need to come to a stop. Hopefully it won't be too late for Main Street when it does.