At Work

Raise the minimum wage; the states know best … 🤑🤑

The debate rages on. Will raising the minimum wage increase prices, will it cost jobs, will doing so cause minimum wage workers to lose working hours … and most important will raising the minimum wage provide a net gain to minimum wage workers and the middle-class as politicians claim?

Following is an excerpt from a WSJ article 3-29-16 about California raising its minimum wage to $15.00 an hour by 2022.

John D’A­manda, a 56-year-old Mc­Donald’s cashier in Oakland, said a higher wage could al­low him to move out of a group home where he shares a room and re­lies on groceries from a food bank. The pay increase could even let him to pro­pose to his girl­friend.

“It would make a huge dif­fer­ence,” said Mr. D’A­manda, who has taken part in sev­eral “Fight for $15” protests. “I want to get mar­ried, but I can’t af­ford it.”

Mr. D’A­manda makes $12.55 an hour un­der Oak­land’s wage law. He said when that in­crease went into effect last year his hours were cut to 16 a week from 25. He plans to ask for more hours or seek out a sec­ond job.

First, a 56-year-old man is far from the typical minimum wage earner. Second, after reaching $15.00 an hour he will still be a low skilled, low-income part-time worker subject to the travails of such a job. Finally, will an increase of $61.25 a week (assuming he gets back to 25 hours a week) less at least payroll taxes change his life to enable him to meet his goals; ignoring the very likely overall rise in prices for goods and services that must result from such a change; modest or not?

imageThe starting salary for an elementary school teacher in most California districts is about $39,000 only $4.32 an hour more than the new minimum wage. For police officers the low-end salary ranges from about $36,500 to $39,000.

Does anyone seriously think that this compression in cash compensation will go unnoticed by the public employee unions?

Providing a modest income boost to minimum wage workers absent the normal market wage drivers sounds great. It makes for appealing political rhetoric, but it is not without a variety of consequences many of which are negative not only for these workers, but for the middle class as well. In the final analysis, these workers we are trying to help are in the same place as they were before.

What we are doing is boosting them one step up on the economic ladder while adding another rung simultaneously.


2 replies »

  1. Why is it only a few of us see this affect. Gov. Kasich is due to speak in Marietta, OH tomorrow and the give-a-way left are pushing the $15.rate.

    Make a positive difference in someone’s life today. Sent via my cell phone – Bill Mitchell


  2. As I stated in a prior post:

    Let California (and now New York) go their own way, and the rest of the states can go their own way, and, we will have a great set of data points in 15 years – giving effect to the concept of laboratories of democracy – what the Supreme Court once asserted, way back in 1932, before there was a federal minimum wage. I would love to revisit Mr. D’Amanda in 15 years to see how his life worked out (employment, more hours, 2nd job, getting married, etc.) Even though he is clearly not the “typical” low wage worker, what a great case study! For today’s Millenials, I would love to have a weekly column that confirms his struggles, and his joys, and his regrets – it would be instructional to all of us. Who knows, even the Millenials might pay attention. I think it a great new reality TV show (we could add to his hours by paying him the new minimum wage for the time spent as the star of the show).

    Laboratories of democracy comes from a 1932 Supreme Court opinion by Brandeis: “state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” This relates back to the 10th Amendment of the Constitution where: “all powers not delegated to the United States by the Constitution, nor prohibited by it to [from] the States, are reserved to the States respectively, or to the people.” I do believe in the 10th amendment – as given to us by the founders. I do not believe every issue should be federalized. What is best for me in Ohio is not necessarily best for me if I were to move to California. And, what is best for my son, who currently lives and works in California, would not necessarily be best for him if he were to move back to Ohio.

    Bottom line, CA and NY have decided to create and test a higher minimum wage – so, let’s let this (almost) scientific method of experimentation go forward for a test – keeping in mind that a “fair test” using the scientific method can ONLY occur if you keep all other conditions the same while you change only one factor (the variable – here, California’s & New York’s minimum wage) and you don’t change any other minimum wage, federal or state, nor introduce any new federal or state welfare/wage legislation/regulation that would affect the experiment. Let’s see if people migrate to CA and/or NY for the higher minimum wage. Let’s see what the impact is on individuals whose productivity cannot justify a $15 minimum wage – whether there is a gain in employment, a loss of employment, a gain in poverty or a reduction in poverty, a gain in population in CA & NY or a reduction in population in CA & NY– relative to the other states. We would also want to keep an eye on the “black market” for labor, those who could give a care about minimum wage – avoiding the minimum wage, the employer mandate for health coverage, workers compensation premiums, and everything else employers are required to deliver simply by hiring illegals. In fact, will we see migration of more, and more and more illegals to CA and NY because there is employment there in the black market?!


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