10/16/2006

Minimum Wage

I recently received and read Montana's Voter Information Pamphlet. It contains arguments for and against I-151, the proposal that would raise Montana's minimum wage to $6.15 per hour (from the current $5.15) and annually increase the wage as inflation increases the Consumer Price Index.

I own part of three businesses, and none of them start their employees at minimum wage. So personally the Initiative means little to me.

I also question how many adults actually earn minimum wage. A recent perusal of the help wanted ads in the Great Falls Tribune did not reveal any jobs advertising for minimum wage positions.

But those are not my points. My points relate to the arguments offered in favor of I-151. Instead of making or responding to the economic arguments for or against a minimum wage, the proponents argue that it is "fair" or "right" to give workers a raise. It seems to me that these arguments, rather than attempting to provide a logical justification for the position, instead attempt to appeal to the recipients of the increased wages. After all, who would no doubt feel it is "fair" that a worker should get a raise but the worker himself? (or herself?)

And what is "right" or "fair" is certainly in the eye of the beholder. While I agree it would be impossible to raise a family on a minimum wage income, if a person manages to reach the age of adulthood without acquiring the skills necessarily to allow himself or herself to compete for a reasonable wage in the marketplace, and has a kid, is it really "right" or "fair" to require a complete stranger, the employer, to subsidize the worker's failure to pay enough attention to his or her own life and well-being to acquire desireable skills? And is it "right" or "fair" to require that employer to give the worker a raise every year based on inflation without any regard to the employer's ability to raise his or her own prices?

This is not meant to be a tirade against minimum wage. The same is entrenched in our system, and another buck an hour probably isn't going to hurt many employers (although if it hurts you, I am sure that's enough for you!). But if you are going to vote for I-151 based on what is "fair," you might remember that "fair" has two sides.

4 comments:

WolfPack said...

What purpose will the new minimum wage serve? A raise for high school kids and waitresses whose tips are not counted as a wage? In most restaurants in town the waitresses are the highest earning non-management employees, effectively making $12 or more an hour with tips, yet they will be the only ones to benefit from upping the minimum wage (don’t believe this then ask any cook).

I agree that upping the lower limit is not going to make the minimum wage worker any more valuable and I also believe it will encourage employers to find labor saving substitutes like new equipment. These displaced workers than erode the market for labor and actually reduce labor values in the lower end of the market. The only real way to increase wages is through a labor shortage not price controls. The best way to create a labor shortage is by growing the economy so employers have to compete for workers. Another way would be by fixing our immigration system so that our low skill workers are not competing with illegal immigrants for jobs which tips the scales to the advantage of the employers.

Anonymous said...

In a historical context the minimum wage was necessary to provide opportunity for non-union workers who had little or no power to resist predatory labor practices. At a time when jobs were few and workers were plenty an employer could always find someone who would work cheaper than the next guy and they did exaclty that. Do we still need such protection? Well, when many companies now seek cheap labor overseas it seems that employment practices have not evolved all that far. If we did not have some sort of minimum would we have substandard employment conditions found elsewhere? Should the minimum be raised to ensure that the poorest of society can still buy milk and gasoline at $3.00 per gallon?

Anonymous said...

I was planning on blogging on this myself; a hike in the Minimum Wage is nothing more than a feel-good exercise designed to drive D party faithful to the polls.

It will do nothing. Except for a few isolated individuals, the only people that earn the minimum wage are high-school kids on their first job.

Entry level jobs throughout Montana, and certainly in Great Falls, now exceed $8/hour. If you don't believe that, try to hire someone for an entry level job for less.

SallyT said...

The arguments I've seen for I-151 can be summed up as:
We are entitled to dictate wages paid by businesses, in perpetuity.