Minimum wage an unfair intrusion of government

Editorial

Last month, many people with apparently little or no knowledge of economics heralded the arrival of a higher federal minimum wage.

Although it’s true the mandated wage had held steady at $6.55 an hour since 1997, individual workers have been moving up the wage scale and improving their value to the market since then.

Very few workers making minimum wage stay at that rate for long. They learn new skills to make themselves more valuable to employers. If the employer they start with can’t or won’t recognize that added value, workers will move on to greener pastures and up the pay scale.

In addition, most minimum-wage workers are not the primary wage earners in a household. Most are teens earning money for the first time, not single parents struggling to raise a family.

These teens will, like other entry-level employees, move up the ladder as their skills improve.

Of more concern, however, is that minimum wage laws are a government intrusion into private relationships between employer and employee.

Employers offer jobs, especially entry-level jobs, at a wage their businesses can sustain. Potential employees are free to accept that wage or look elsewhere for work. There is no coercion involved.

Moreover, wage mandates often harm the very people they’re supposed to help. Minimum-wage laws can help only those who have jobs and study after study has shown these mandates cost some workers their jobs and prevent employers from offering jobs to others.

A recent opinion piece by Richard Berman of the Employment Policies Institute in the Colorado Springs Gazette noted that for every 10 percent the minimum wage rises, 8.5 percent of the most vulnerable workers lose out on employment opportunities.

In addition, a one-size-fits-all approach is ill-suited to the variety of jobs in our economy. Even the same job, say, dishwasher in a restaurant, is worth different amounts in different cities, depending on the local cost of living. Politicians and bureaucrats in Washington have very little idea, if any, what that job is worth in Portales or any of the thousands of other markets across this country.

Government has a few clearly defined roles in a free society; setting wages and prices are not among them. Any wage or price government sets is arbitrary, a figure pulled out of the air by someone who believes he or she knows better than entrepreneurs who have a vested interest in the market.

If the idea behind minimum-wage laws is to improve the lot of working people, why set the wage at $6.55 per hour? Why not $10 per hour? Wouldn’t that help workers even more?

Government has no idea what the tens of thousands of jobs in our economy are worth and shouldn’t be in the business of assigning values to work. From there it’s a short step to government assigning production quotas and prices. A quick review of the success of planned economies will show the fallacy of that approach.