Raising the minimum wage on its face sounds very compassionate and well meaning for those promoting this concept. It makes for very good politics in the sound bite media because those arguing against it paints a picture of one being cold, insensitive and greedy towards those struggling or starting out with low wages for lessor skilled jobs. On its face, you would think this is benefitting young people who are getting into the workforce, but lets look at reality and the acutual results of the minimum wage.
The age group from 17-25 more than doubled in less than a decade when the minimum wage came into being. Today, I have seen unemployment rate figures for this group as high as 26%. Some ethnic groups and regions, it’s a staggering 40%. As the minimum rate increases, the employer is forced to hire more skilled and productive employees to justify paying the higher rate. That leaves less opportunity for those looking to enter the workforce to learn a skill and prove themselves to justify a higher wage to the employer. The reality and results of the minimum wage is increased costs of goods and services. It has increased poverty for this age group in particular.
Lets look at the politics. Who do you think spends the most time and money in regards to campaign donations for lobbying to increase the minimum wage? Its AFL-CIO, CSEA, teacher & trade unions and the like. Most of its members don’t earn anywhere near the minimum wage so why are they the champions of a higher minimum wage? Primarily, it protects their members from competition of lessor skilled and lower earning workers who can do the job as well or better. Who is always lobbying for the “Prevailing Wage” limits where they are double or more compared to that of the private sector? Its the same. Our schools, municipalities, towns and cities are forced to pay double the cost for a project due to the prevailing wage laws (i.e. Wick’s Law). When I owned 5 franchises in the southern tier, I won a bid to do some work for SUNY Binghamton. The job cost was more than double than if I was bidding a similiar job in the private sector solely due to the state prevailing wages I was going to be required to pay my workers for that job.
Being forced to pay the prevailing wage is just another way of wealth distribution essentially. It hinders the cost of doing business. NYS is the most expensive state to do business in primarily having the largest union workforce percentage wise compared to other states and it not being a right to work state. Those states that have right to work legislation have lower unemployment rates among all groups.
Those well meaning sponsors of a higher minimum wage appear compassionate and concerned, but they know the above is true which makes them all the more like a Pharisee using deception because they so desire the praise of others and a bigger campaign fund to maintain their position and power.