At least as often as every election cycle the effort to boost the minimum wage reappears on the scene.
It’s a tactic particularly popular with Democrats as it makes them seem to care for the little guy and paints opponents as uncaring tools of big business.
John Kerry recently set the stage for the old battle when he voiced support for boosting the minimum wage to $7 per hour. What Kerry and other supporters of the hike seem to miss is that their efforts to help unskilled, low-income workers actually costs some of them their sole source of income.
If the government forces employers to pay more for workers, they have two choices, neither good for workers. Employers must cut the number of hours employees work or raise prices to make up the difference between the old wage and the new.
Either option results in lowering the buying power of minimum-wage workers.
Supporters of raising the minimum wage sometimes rebut the claim that such hikes can result in job losses. According to The Wall Street Journal, after the most recent hike in 1997, Bill Clinton’s Small Business Administration found the hike “slowed wage growth at small businesses and more than doubled the likelihood that low-wage workers at large firms would be unemployed.”
Besides, few workers remain in minimum-wage jobs for very long. Experience and training allow most workers to begin working their way up the employment ladder. Since 1999, minimum wage workers have seen an increase in median wage growth of 10.4 percent, according to the Employment Policies Institute. And that’s without government interference and a recession.
It’s easy for politicians to decree from Washington what this worker or that ought to be earning; it doesn’t cost them anything. But employers must find some way to pay the higher wages and stay in business. If government wants to help, it should get out of the way and allow business to run the economy.