The never-ending efforts by government officials to increase the minimum wage is another example of the fact that politics and politicians never change.
In 2006, then-Assemblyman Ray Haynes in California called it “The Minimum Wage Calamity” in his Monday Morning Memorandum. The following are some excerpts from his commentary:
“In the wake of high energy costs, high building costs, high liability insurance costs, and workers’ compensation reform that doesn’t reduce costs nearly as much as we need to, we cannot afford to drive up the costs of doing business in California even higher. Even if you do not pay the minimum wage to more than a handful of employees, the inflationary impact it has on the entire salary scale can be significant.”
“… Left-wing political rhetoric has succeeded in confusing the people into thinking that a ‘wage’ is an entitlement, not the price that the worker is worth in the marketplace for the job performed, the skills possessed, or the desirability of the worker to the employer. I think it is time we remind ourselves that wages are, in fact, a price paid for labor.”
“Everyone is familiar with the harmful economic effects of arbitrary government price controls in other aspects of the economy. Rent control results in fewer rental units. Price control on any goods results in fewer of those goods. Price control on labor results in fewer jobs.”
“It is an emotionally charged issue, which fails to take into account the ‘side effects’ of the law. If an employer has to pay an employee more than that employee produces for the company, the employer is losing money. So either the employee is fired, or the company goes bankrupt. Either way, the employee loses the job. This is government-forced unemployment.”
A forced minimum wage deprives the workplace of some lower skilled workers who would be capable of rendering beneficial services to an employer if that employee were allowed to be paid what his or her effort was worth, making the employee a productive member of society. The worker has been deprived of independence and self-respect, which comes from self-support, even though he or she would otherwise be willing to do the work at a lower wage. Even worse, the best way to get a higher-paying job is to do well at a lower-paying job.
According to an analysis produced by the National Center of Policy Analysis, “The primary cause of low income … is no wages, not low wages.” It concludes that most of those who earn low wages are either teenagers or other secondary earners spread rather evenly across the income distribution scale. According to a summary of their analysis, “While the single mother trying to support her child on a full-time minimum wage job is a better story, the 16-year-old hamburger-flipping student with college-educated and employed parents is a better fact. Low-income families have a large number of people without jobs and without the skills to get a job. A mandated minimum wage forces them even further out of the job market.”
“Increasing the minimum wage increases the cost of goods and services, forcing many of the people who lost their jobs as a result of this government intervention to either pay higher prices, or do without. The government has deprived them of a job they could perform, and which would form the basis of further training to acquire higher wages, and has increased the price of goods that they might otherwise have been able to buy …”
— Harris R. Sherline is a retired CPA and former chairman and CEO of Santa Ynez Valley Hospital who as lived in Santa Barbara County for more than 30 years. He stays active writing opinion columns and his blog, Opinionfest.com.