Georgia Voices: The wages of politics
by The Gainesville Times
May 13, 2014 12:14 AM | 1950 views | 0 0 comments | 37 37 recommendations | email to a friend | print
Now that we think of it, maybe it would be best to have legislators stay home during an election year.

That’s not doable, of course, particularly in Congress, where a third of senators and all representatives are up for re-election every two years. But based on the ideas we see proposed at the state and federal levels, it’s clear most even-year legislation is aimed not at solving real world issues but getting in the heads of voters before they cast a ballot.

Today, we’ll train that notion on the push in Washington to raise the minimum wage to a nationwide standard of $10.10 an hour, up from the current $7.25.

A bill proposed last week by Senate Democrats would raise the rate incrementally, first to $8 then up to 10 bucks and a dime over time. It was stalled by minority Republicans through a filibuster, the party-line 54-42 vote not enough to bring it to a vote.

The arguments for and against a minimum wage hike fall along those lines: Democrats claim those who work for such pay can’t make ends meet and deserve a raise; Republicans cite the likelihood it will cost jobs and hurt small businesses.

While we acknowledge how difficult it is for some to live on such meager pay, we tend to agree with the latter argument that the damage done by such a move would counteract its benefits.

That said, back to our original point: Last week’s bill, like others previously proposed, was clearly aimed at voters during an election year. Democrats know that by having their plan rejected, they can again paint the GOP as the party of rich bullies and stir up their voting base. Same as it ever was.

The debate boils down to an economic quandary: What is the tipping point for labor costs at which businesses will be forced to cut jobs, hurting rather than helping those who need them most?

A Congressional Budget Office report said a higher rate would reduce employment by about 500,000 workers from among 28 million Americans who earn minimum wage. That’s about 1.4 percent of such workers, if accurate, not a huge percentage. Yet is it worth it to put half a million people out of work so the others can buy a little bit more?

Backers claim the evidence of lost jobs is not evident in states that have raised their base pay beyond the federal level. That’s a valid argument, but not for raising it across the board nationwide. What it proves, instead, is that the different economies throughout such a large and diverse nation are not best served by a one-size-fits-all federal mandate.

Minimum wages indeed are higher in several states and cities, mostly those with growing, vibrant economies that can withstand the costs. Just last week, Seattle’s mayor proposed raising that city’s floor wage to $15 an hour. It may be that such an upscale city can handle that bump without massive job loss or inflation (though it’s worth noting that one of the city council members pushing this is an avowed socialist, likely unconcerned by the impact on free markets).

States that have raised their minimums include California, Minnesota, Connecticut and Maryland, all boasting healthier economies not dragged down by manufacturing slumps or lost industries that have slowed the recovery elsewhere.

So perhaps the best way to deal with the minimum wage is what is already being done: Let it be decided on the local and state level. As with so many other policy decisions, it gives everyone more input and doesn’t force one part of the country to unfairly meet standards set by another.

The downside of raising the wage to a higher level in areas where economies remain shaky is not hard to see. Small businesses who already are just scraping by can only afford to pay so much. Many are already dealing with higher costs for health insurance, as imposed by the Affordable Care Act (those with enough employees to qualify; some have cut back on staff or made many full-timers part time to avoid such measures).

If you own a small business and can’t afford to raise the pay of your 15 workers, you might trim back to 10 or 12. That means putting a few workers out of jobs — those who need that pay the most. The unemployment rate has been falling in the state and nation, but a federally imposed pay hike surely would bump it back up.

The other alternative for businesses is to raise the cost of goods and services to absorb the higher labor costs. Yet that could drive away customers, leaving less money flowing into everyone’s pockets. At a time when the economy is showing signs of real recovery, it’s unwise to knock it down by forcing such difficult choices.

And keep in mind, a large number of wage workers are young, entry-level employees who need workplace experience more than they do a paycheck. A higher rate leading to labor cuts would keep many young people from being able to find summer jobs.

The best way to reduce poverty is not with government policy requirements, but through the creation of more good-paying, private-sector jobs that can better support families. And the way to do that is to decrease burdens on businesses big and small and maintain a climate in which the economy can grow, prices can stay low and money is flowing freely.

When that happens, those who have mouths to feed and the experience to fill such jobs can leave the minimum wage positions to teens and college students who only need pizza money and a little job seasoning.

At the very least, our national leaders should discuss this issue with clear eyes and honestly discuss its potential effects, pro and con, rather than just play election year “gotcha” as a cheap stunt to gain voters.

Good intentions mean little when they’re wrapped in self-interest and dishonesty for the sake of political gain.

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