The news of a 70 cent per hour raise for workers earning minimum wage was the result of the clamoring of a fallacious argument that there are vast untold masses out there trying to support a family of six on $6.50 an hour. That argument has been made for decades and is totally dishonest. Take the photo above, for instance; it’s over two years old, but the McDonald’s on Main Avenue here in Bismarck was paying up to $8.00 per hour at a time when the minimum wage was in the six dollar range!
Take this quote from Job Service of ND employee Michael Ziesch, via KX News: “Most employers have already been paying above and well above min. wage esp. to retain qualified employees. Even in the job offers we see, that employers post with our agency, only about 6-percent of those offers, that include a wage, include a wage that is at or below minimum wage.”
So who makes up that six percent of North Dakota workers? According to Mr. Ziesch: “…most of the minimum wage jobs are held by the very youngest employees in the work force and some of the older employes in the work force.”
So, congratulations…those of you who are trying to support a family of six just got an effective 70 cent per hour pay cut, as the wage floor has been brought up. All in the spirit of making liberals somewhere feel good. Here’s why this is such a sad, sick joke (as are most liberal policies):
Suppose you are some poor guy who’s working a minimum wage job — maybe even two — to support a small family. You’ve got age and a little experience on your side, making you a more dependable and responsible employee than some teenage kid working his first job. It’s allowed you to work your way from $6.50/hr starting to $7.25/hr due to a series of incentive raises that you’ve earned for being a good employee. You’re not exactly “movin’ on up like George and Weezy,” but you’re advancing.
Next comes the latest federal feel-good program, the minimum wage increase. Now everybody is making what you are…including the 16 year old that sauntered in yesterday to apply for a job. In the mean time, the price of goods and services that you purchase for your family is going to go up to absorb the increased labor costs of the store from which you buy them. Effectively, you just got a pay cut.
According to that Job Service fella, 94% of North Dakotans are included in the pay cut group. These are the people who are not making minimum wage, or at least they were not prior to the jump to $7.50/hour. What if you make $9 or $10 per hour? You now effectively make $8.25 or $9.25. You went backwards because the bottom wage just came closer to what you earn.
When I’ve tried to make the argument against the idea of huge numbers of North Dakota employees making minimum wage, I have heard the argument that many of them are making “just above minimum wage” and don’t figure into the statistic. Guess what? Those are the people hardest hurt! If they were making $7.50 an hour last week, well above the minimum wage, they just got reset to zero. The minimum wage just went up, not everybody’s wage. Maybe they were making $8.00 an hour, not bad for entry level work. Now they’re barely above the minimum. For the 6% workers we’re told were “lifted up” by this increase, 94% of workers were brought down.
Let’s take a fictitious fast food restaurant, and call it BurgerBama. It pays most of its employees, high school kids who will likely leave after graduation, a minimum wage of $6.50/hour. Suddenly Congress, in its infinite wisdom, passes a law telling BurgerBama that it must pay its employees at least $7.50/hour. The cost per employee just went up by over a dollar an hour! How, you say? FICA and other taxes paid by the employer are based on the employee’s earnings, which just went up by 15%. By the time you factor in all the costs of having employees above and beyond their salaries, you’re looking at a potential 20% increase in the cost of having minimum wage employees.
Now, if your business doesn’t employ minimum wage earners, or at least many of them, you won’t feel this as seriously as others. In the case of retail or fast food work, however, the majority of the business’ labor base will be affected. That means the cost of those hopey-changey BurgerBama cheeseburgers has to go up by 20% just for their profit margin to remain equal! Thus the cost of goods and services will be increasing to absorb this humanitarian liberal hike in the minimum wage. That means that the increase never really had much effect; the people getting the 15% raise will be paying 15-20% more for the goods and services they need to buy with those wages.
This is how supposedly “compassion-driven” legislation works, folks. While I’m sure plenty of politicians are out there patting themselves on the back for “helping the little guy,” the vast majority of workers (especially in North Dakota) just got punched in the wallet. The question is: how many actually know it?
