Raising minimum pay wrong answer for low-wage workers
Efforts now under way by national and state lawmakers toincrease the minimum wage are bad business for those the pay hikesare intended to help.
Workers who get “squeezed” in the minimum wage debate are thosenow making more than the minimum. While workers making less havetheir pay increased legislatively, small employers in allprobability will not be able to afford to also raise the pay ofthose workers.
This has the potential of stifling senior employees’ initiative- thus hurting business – and also lessens the value of a collegedegree or other special training they received in pursuit of makinga higher salary.
For minimum wage workers who support the increase, they aregambling that they, too, aren’t “squeezed” as a result of the payhike. In their case, though, the “squeeze” could put them out of ajob altogether.
The Federal Bank of Chicago estimates a 2 to 3 percent job lossfor each 10 percent increase in the minimum wage. This meanslower-skilled workers will lose out as employers look to retainhigher-skilled workers so as to get the biggest productivity “bang”for their buck.
Employee issues aside, in many cases, the costs of payingworkers more are passed on to a business’ customers. Businessowners may do their best to keep costs down, but legislativeactions like minimum wage increases create an artificial need toraise prices for customers.
Raising the minimum wage on a state or national level is not theanswer, as the free market system is the best arbiter fordetermining wages for workers.