I guess it was inevitable, but with the Democrats sweeping the elections here in New Hampshire last November (the only reason we still have two Republican Senators is that neither was up for re-election this time), all sorts of Democratic ideas — even the dumb ones — would start flying through the Democratic House and Democratic Senate to land on the Democratic governor’s desk, where he would sign them (probably in blue ink) into law.
This week, one of the dumber ones was passed. New Hampshire is raising its minimum wage, going from $5.15 to $6.50 on September 1, then $7.25 a year later.
In all the arguments about the minimum wage, I’ve always brought up one question that no one has been able to answer: how many people actually earn the minimum wage for an entire year?
I’ve been lucky; I’ve never held a minimum-wage job. But I’ve started out close to it on a couple occasions. And every single one of them had a “probationary” period, usually 90 days, at which time I was evaluated — and given a raise. That seems pretty much standard. The attitude seems to be that if you’re worth keeping around, you’re worth giving a raise to — and if not, then see ya.
And let’s take a look at minimum-wage jobs. This took some effort, because pretty much every place around pays above that rate. The last time I drove past a McDonald’s with a NOW HIRING sign, they said they were starting burger flippers at $8.50. And Wal-Mart — you know, big evil Wal-Mart — also starts its people above minimum wage.
So without a concrete example at hand, let’s speculate. Minimum-wage jobs are jobs that require little to no specialized skills, involve very little responsibility, and reflect no position of trust on behalf of the employer. They are the jobs that pretty much no one wants. So who would accept such a job?
Two groups come to mind: those with no established job history, or those with a very bad established job history.
In both cases, those jobs can be seen as stepping-stones for them. The ones with no job history — the young workers — can start out on building a job history, showing that they will accept work as they find it, show up on time, do their job, and prove they can make it as a worthwhile employee. After sticking it out for a while, if their employer doesn’t give them a raise and/or promotion, they can then list that job on applications for other work. And it’s a long-standing truism that employers are far more likely to hire someone who already has a job than someone who’s unemployed.
On the other hand, those who have a lousy job record can start rebuilding it. Had six jobs in the last two years? That looks lousy on a resume or application. Find a job you can handle, and hold on to, and start building up skills. Most employers prefer a one-page resume, so you can use that job to push the bad stuff off the bottom of the page.
I’ll use myself as an example. I’ve been with the same employer for over nine years. I’ve held a wide variety of positions with the company, in several locations. I have to cut stuff from this one career to reduce it to a single page. My four previous jobs ended when I was laid off, terminated, resigned, and the company went out of business — but they don’t show up on my resume, and as they were all 10 years or more ago, nobody cares. (Ironically, I once rode three employers in a row into bankruptcy/dissolution. For a brief while, I felt like a “Typhoid Mary.”)
Let’s run some numbers. New Hampshire is, over the course of the next 16 months, raising the minimum wage roughly 40%. That means that in order to maintain its payroll, a company that employs seven minimum-wage workers will have to cut two of them. Alternately, it can keep all seven, and find another way to cover that 40% hike in payroll.
The standard argument for raising the minimum wage — “no one can live on that!” — is, largely, bunk, because the number of people who actually do live on it for an entire year must be pretty minuscule if no one can actually cite them.
So, why the big push? I’ve heard a few theories. Of course, the “feel-good” argument is a classic. If something seems unfair, do something — anything — that makes you feel like you’ve done something to make it better. It doesn’t have to actually achieve anything, and can even make things worse, but as long as you have responded in a way you think is good, then all the better. (See “scratching a rash” and “drinking your problems away” for other examples.)
That’s not enough of an explanation. I’ve heard another theory — that several unions have contracts where their base rate is calculated as a multiple of the minimum wage. If that minimum wage goes up, so does their pay — and in a proportional, not linear fashion. Suppose you’re a union carpenter whose hourly rate is set at 3 times the minimum wage. (Right now, that would be $15.45 — a not-unreasonable rate for a tradesman, especially a fairly new one.) While the mop jockey at the porn shop is getting a $2.10/hour raise, you’re going up $6.30/hour. That’s a nice hunk of change. And even better, you can push for it while saying it’s for the “poor, underpaid” workers.
It also plays into the “evil big business” meme. Big companies make big profits; they ought to share them more with their workers, the people who help them earn that money. But that is too simplistic.
Businesses stay businesses by controlling costs. If we — as a society — force them to pay their workers more, they’ll make up that expense in other areas. They will either hire fewer workers, cut other expenses, or increase their revenues.
“Hire fewer workers.” Translation: those making minimum wage will have even fewer places they can work.
“Cut other expenses.” Translation: cut back on the money they pay other companies, slashing into their revenues and forcing them to make cutbacks.
“Increase their revenues.” Translation: higher prices for their stuff. And since the stereotypical companies that pay minimum wage tend to cater to the lower economic strata, that means that the poor will be hit with a double whammy: fewer jobs and higher prices.
I’m no economist, but I just don’t see how hiking the minimum wage actually does a damned thing for those who are being used to champion it. And I have never — ever — been a champion of the emotional over reality.