We hope those who continually agitate for a higher minimum wage don’t try to make too much of a Dec. 20 report from the National Low Income Housing Coalition. The coalition noted that a minimum-wage earner can afford a single bedroom apartment in only four of the nation’s 3,006 counties.
At first glance, that number seems daunting for the many Americans in minimum-wage jobs. But further reflection reveals a few points.
Most people earning minimum wage are entry-level workers who become more valuable to employers as they learn new skills. And as a general rule, the more they learn, the more they earn.
In addition, many of those entry-level workers earning minimum wage are teenagers. They usually live with their parents, so, with few exceptions, income is irrelevant to housing. For those few whose income becomes part of the family income, they are seldom the sole wage earner in the household.
If the feds were to mandate a higher minimum wage, it likely would harm rather than help many workers.
Employers can pay out a specific portion of revenue for wages. When they’re forced to pay the bottom tier of workers more, the number of workers they can employ decreases.
So although some workers will earn more, some will lose all of their income.
The employer’s other choice would be to increase the price of his product to raise the revenue to pay all workers. That strategy can work, but it can also cause customers to go elsewhere, resulting in lower revenue and job losses.
It’s better to allow the market to set wages for jobs.
Employers know what a particular job is worth to them; that’s the true worth of the job, not what some government bureaucrat a thousand miles away thinks it should be.