Minimum wages better than none

Published on Sunday, 14 July 2013 23:14 - Written by

Results matter just as much as intentions. Politicians may mean well when they call for raising the minimum wage, but the results more often than not are disastrous for workers.

The Washington, D.C., city council wants to raise the minimum wage in the district, and that move could drive away thousands of jobs.

“The world’s largest retailer delivered an ultimatum to district lawmakers Tuesday, telling them less than 24 hours before a decisive vote that at least three planned Wal-Marts will not open in the city if a super-minimum-wage proposal becomes law,” The Washington Post reported last week. “A team of Wal-Mart officials and lobbyists, including a high-level executive from the mega-retailer’s Arkansas headquarters, walked the halls of the John A. Wilson Building on Tuesday afternoon, delivering the news to D.C. Council members.”

The bill is directly aimed at Wal-Mart, which had planned to employ as many as 2,000 people in the district. Other retailers, such as Home Depot, are protected by a grandfather clause.

“The D.C. Council bill would require retailers with corporate sales of $1 billion or more and operating in spaces 75,000 square feet or larger to pay their employees no less than $12.50 an hour,” the Post explains. “The city’s minimum wage is $8.25.”

That pay hike of more than 50 percent would cost the city council nothing — because we’re talking about someone else’s money.

According to Wal-Mart regional manager Alex Barron, writing in the Post, the minimum wage hike would “result in fewer jobs, higher prices and fewer total retail options. … Most shopping dollars would stay in the suburbs, unemployment would remain in the double digits in some neighborhoods, and underserved communities would continue to have disproportionate access to affordable groceries.”

Everyone suffers. That’s what happens when politicians raise the minimum wage. And it’s the poor and the young who suffer most.

“Minimum-wage positions provide on-the-job training for unskilled and inexperienced workers,” the Heritage Foundation notes. “They teach workers basic employability skills, from the discipline of getting up for work on time to how to interact with customers. As workers gain experience and skills, they become more productive and command higher pay. That is why two-thirds of minimum-wage workers earn raises within a year. The minimum wage is a learning wage, the first rung on many workers’ career ladders. A higher minimum wage saws off this rung.”

This isn’t just economic theory; these are real jobs that won’t come to depressed District neighborhoods. Washington Mayor Vincent Gray realizes this.

“The cancellation of three planned stores will surely set us back,” he said in a statement. “I strongly urge the council to consider whether this legislation will actually promote strong economic development in the district and expand job opportunities for district residents.”

Gray has indicated he could veto the proposal if it comes to his desk, but members of the council aren’t backing down. And neither is Wal-Mart.

President Barack Obama has proposed a national minimum wage hike. But he might soon be able to see the negative results of such a hike, in his own neighborhood.