Minimum Wage

The federal minimum wage has been $7.25 per-hour since 2009. Even though 96% of gainfully employed Americans earn more than the minimum, there is a push to increase it to a “living wage.” Minimum wage is a bad idea for several reasons: It ignores the concept of entry level jobs, it forces mechanization and/or elimination of low skilled jobs, and it interferes with the free market.

I got my first job off the farm before I was in the eighth grade. I bagged groceries at Bob’s Market for $.75 an-hour. A few months later, my application at the supermarket out on the highway rose to the top of their stack, and they offered me $.80 and more hours. I worked there for five years. My employers lost money on me during the first six months while they discovered I was reliable, willing to work and quick to learn. They gave me more responsibility, upped my hours, and paid me union scale. When I left that job to go to college, I was experienced in every job in the store, from janitor to shift supervisor. I learned to work, I learned that the store had to make a profit for me to have a job, I learned to deal with people in stressful situations. (I had to notify Mrs. Jones when her checks bounced.) That job was a valuable opportunity and helped shape who I am. My experience is not possible today. State child labor laws do not allow school-age kids to work the hours I did, and the minimum wage makes it too expensive to sort out good workers from good intentions.

My grandson worked for Jimmy Johns during his last year in high school. He made and delivered sandwiches for $9.47 an hour. When the minimum wage jumped to $11, they could no longer afford him. They reorganized and eliminated some entry level jobs. My son lives in Seattle. When my wife and I would visit, it was our routine to stop at a restaurant at about the halfway point. We stopped there faithfully, going and coming, until the minimum wage was extended to waitresses. Our restaurant was unable to stay in business and disappeared. It is now an empty building, and those waitresses who were happy to count tips to calculate their wages have one less place to work. Employers must make a profit to stay in business. Competition demands economic efficiency. Someone will invent a sandwich maker and Jimmy Johns will no longer hire entry level workers. Robots have halved the labor force required to make cars, they surely can do the same for sandwiches. When I worked at the supermarket, I became proficient at operating a cash register. Automatic checkouts are no longer uncommon. I worry about the next generation. Where will they learn a work ethic?

The free market is a wondrous thing. Left alone, it can make adjustments and accommodate needs that you or I can’t even predict. If there is a transportation need, the market will provide it. If a new factory is needed, the market will ensure it gets built. The market also sets prices. Commodities that are rare and in demand are more valuable than items in excess of what the market needs. I know of no instance where manipulation of the free market has had lasting benefits. When prices are artificially set by government, the market becomes unstable and frequently adjusts in unforeseen ways. Labor is a commodity no different than any other. The minimum wage is an artificial intrusion in the free market. The Washington Legislature didn’t intend to put waitresses out of work in central Washington, but they did. We have a homeless epidemic, but if we give a homeless person a job, we have to pay fifteen dollars an hour and give them sick leave! Minimum wage is, and always has been, a bad idea.

(Frank Watson is a retired Air Force Colonel and a long time resident of Eastern Washington. He has been a free lance columnist for more than 18 years.)