Small Town News


Raise in minimum wage has many unseen problems

Cheney Free Press of Cheney, Washington

- Advertisement -

In Our Opinion

On the surface it certainly sounds good.

Bumping the minimum wage in Washington state from its current $9.47 per hour —the highest in the nation — to $12 could help some people elevate themselves out of poverty.

House Bill 1355 recently passed the Democrat-leaning chamber of the state Legislature and is now in the hands of the Senate, primarily a Republican body. The conjecture is it will either die there, or undergo significant changes before it reemerges.

But before it might see daylight, what are some of the other costs besides the advertised $2.53 jump in pay?

Among the reasons proponents see as positives in HB 1355's passage are workers earning the current minimum wage should be able to pay for basic necessities and not require government assistance to do so.

They have yet to, however, look at some of the hidden costs and unintended consequences of such a supposed good deed.

Those pushing the legislation will tell you even if this law is put in place as planned over several years, it will not adversely affect business. But they apparently have not spoken with many companies, specifically small local enterprises so vital to our economy.

Perhaps national chains can better absorb a nearly 25 percent increase to employee salaries— not including the additional taxes and other fees, adding another 25 percent.

There are several businesses that are likely to be most impacted. They operate on a small profit margin and adding dollars to the balance sheet more often than not means cuts in jobs before adding cost to their product or services.

It's not hard then to start doing the math and all of a sudden realize there are real hard consequences. Businesses are being legislated out of existence in some cases.

People forget that this is a minimum wage and not meant to be a living wage. It was meant to be starting pay for entry-level workers learning job skills to serve them down the road.

This effort to bump low-end hourly pay comes primarily from Western Washington where the cost of living is significantly higher, so it is understandable to see the need for some to earn a bigger paycheck.

But a higher minimum wage can be more punishing than it is helpful.

One area business that deals significantly with the minimum wage pool has echoed opponent's fears that this will take away entry-level jobs. If the minimum earner goes from $9-$12, that leaves little to reward the managers and those already earning a top tier wage of $12 per hour.

What's in it for the person who has shown initiative to climb that ladder, only to see their wage just 50-cents better than the newbie?

A higher minimum wage tends to keep workers complacent to remain where they are, rather than trying to better themselves. This same business owner says that only about 10 percent of his 30 employees are those traditional entry-level jobs — students. This is in direct contrast to 20 years ago when the numbers were very much opposite with 20 of 30 working part time and going to school.

The customer of such a business also loses. Each 50-cent raise in the minimum wage means a noticeable increase in product. So far, so good as far as business volume, but one wonders where the line will be crossed?

Even in places where one might not expect to be affected, the costs come in a number of waves.

In the case of the Cheney Free Press, where there are a handful of entry level positions, any mandated raise is difficult to swallow because we have little ability to raise the price of our product.

The option of adhering to this law is cutting staffing, or to have employees start paying parts of medical insurance, a cost the company currently covers in full. Why should the paychecks of those who have gone the extra mile to gain elevated skills and experience be devalued to assist entry-level workers?

Sure it feels good to suggest legislating a pay raise for low-wage workers. But when one does the math it simply does not make sense.

Raises are earned, not legislated, and for good reason.

Copyright 2015 Cheney Free Press, Cheney, Washington. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from SmallTownPapers, Inc.

Original Publication Date: March 12, 2015

More from Cheney Free Press