Lodinews.com

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

Why San José’s new wage should not be celebrated

Print
Font Size:
Default font size
Larger font size

Posted: Tuesday, March 19, 2013 12:00 am

Everyone wants to make a decent living. But unfortunately, local government intervention, such as the city of San José raising its minimum wage to $10 per hour, has harmful consequences.

Apparently, a couple of college students got the idea from a "Social Action" (SOCI 164) class and pushed the agenda. No reports as to whether these students or their professor have had any experience in making small business payrolls.

But let's follow this idea logically: If a mandated minimum wage helps those at the bottom of the pay scale, then why not raise it to $12, $15, $20, even $30 per hour? Wouldn't that help even more?

Extra money for pay hikes has to originate from someplace. Some supporters believe that it comes out of the pockets of "evil" corporations. In reality, it is generated from hiring fewer people and raising prices. It also means that salaries already above the minimum standard have to be jacked up as well.

Local reaction to the San José story has been mixed. Some support the move while others express concern.

"If they did this in Lodi and raised prices, I'd probably dine elsewhere," said one friend.

Dave Arney, Lodi resident and owner of a local manufacturing business, predicted dire consequences should the same increase happen here.

"I have around 40 employees," he told me. "I would not be able to raise prices because of stiff outside competition. I'd have no choice but to cut back hours, relocate, or go out of business altogether."

So who profits by raising the bar? The Bureau of Labor Statistics reports that a majority of minimum-wage jobs are held by unskilled workers between the ages of 18 and 24. Turnover of these positions is very high. A recent study reported that the average duration for one of these jobs is around 14 weeks.

Another factor to be considered: Most of these jobs are trainee positions.

They provide an opportunity for unskilled young people to learn a trade and advance to higher salaries.

If one location pays more, experienced people from other parts of the country or state enter that market. They are hired over the inexperienced. Thus, opportunities for those learning on-the-job training are often curtailed.

In June 2006, before a 40-percent increase in the national minimum wage, Forbes magazine reported that 42.1 percent of teens between the ages of 16 to 19 were employed. But by 2010, only 28.6 percent of this group had jobs.

If governmental entities really want to do something to help the lowest wage earners, they can start by creating business-friendly atmospheres for more private-sector jobs. When demand for labor is greater than supply, wages can grow at a faster rate than any politician can decree.

In North Dakota, fast-food jobs are paying an average of $15 per hour in a state where there is a shortage of unskilled labor. It's all thanks to the recent oil boom. Unemployment there is at 3.5 percent vs. California's 9.8 percent.

As a side note, California has the same opportunity to create jobs in energy production as this Midwest state does — coupled with a positive wage trickle-down effect to unskilled, unrelated occupations. However, politicians have refused to take full advantage by restricting development of our valuable natural resources.

So before we break out the champagne corks and celebrate San José's new minimum wage ordinance, let's put the emotional arguments aside and think about the real consequences.

An artificial wage hike is not likely to solve a standard-of-living problem. If anything, it only hurts the very people it is supposed to help.

Steve Hansen is a Lodi writer.

Rules of Conduct

  • 1 Use your real name. You must register with your full first and last name before you can comment. (And don’t pretend you’re someone else.)
  • 2 Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually oriented language.
  • 3 Don’t threaten. Threats of harming another person will not be tolerated.
  • 4 Be truthful. Don't lie about anyone or anything. Don't post unsubstantiated allegations, rumors or gossip that could harm the reputation of a person, company or organization.
  • 5 Be nice. No racism, sexism or any sort of -ism that is degrading to another person.
  • 6 Stay on topic. Make sure your comments are about the story. Don’t insult each other.
  • 7 Tell us if the discussion is getting out of hand. Use the ‘Report’ link on each comment to let us know of abusive posts.
  • 8 Share what you know, and ask about what you don't.
  • 9 Don’t be a troll.
  • 10 Don’t reveal personal information about other commenters. You may reveal your own personal information, but we advise you not to do so.
  • 11 We reserve the right, at our discretion, to monitor, delete or choose not to post any comment. This may include removing or monitoring posts that we believe violate the spirit or letter of these rules, or that we otherwise determine at our discretion needs to be monitored, not posted, or deleted.

Welcome to the discussion.

2 comments:

  • Thomas Heuer posted at 12:57 pm on Fri, Mar 22, 2013.

    nth degree wise Posts: 1325

    M Kindseth silence is not agreement. I simply am not prepard to defend any minimum wagem increase. I seldom agree with anything Mr Hansen puts forth. I would in the meantime like to point out that he does say "In North Dakota, fast-food jobs are paying an average of $15 per hour in a state where there is a shortage of unskilled labor." This would give the impression that raising the minimum wage even beyond the San Jose $10 rate doesn't drive the business to bankruptcy. I mean just living in North Dakota warrants a higher wage.

     
  • John Kindseth posted at 7:57 pm on Thu, Mar 21, 2013.

    John Kindseth Posts: 241

    Steve: I cant believe so many are so unknowledgeable about all the ramifications of the minimum wage issue. Hopefully the silence is from those who understand your essay.

     

Recent Comments

Posted 5 hours ago by Jien Kaur.

article: Letter: Obama may be protecting his chi…

The Mr Liebich said It's always wilfull, entirely predictable, continuously absurd or as Jien recently pointed out, like a car wreck you ca…

More...

Posted 6 hours ago by Eric Barrow.

article: Letter: Questions for Obama supporters

I wonder if I wasn't real when we elected Obama for a second term, seemed kind of real. Perhaps all 66 million of us that voted for Barack …

More...

Posted 7 hours ago by Kevin Paglia.

article: Letter: Lodi must also conserve its wat…

I agree. We, all of us, need to change our water use habits when the drought is on. I have cut my front lawn sprinkler time to just 5 min…

More...

Posted 8 hours ago by wendy coe.

article: Escaped inmate from San Joaquin County …

Gee a picture would be nice, just encase we saw him!

More...

Posted 12 hours ago by Thomas Heuer.

article: Letter: Questions for Obama supporters

The thumb up is to Eric. some time ago. I hate to have it misinterpreted if you know what I mean.

More...

Video

Popular Stories

Poll

Loading…

Mailing List

Subscribe to a mailing list to have daily news sent directly to your inbox.

  • Breaking News

    Would you like to receive breaking news alerts? Sign up now!

  • News Updates

    Would you like to receive our daily news headlines? Sign up now!

  • Sports Updates

    Would you like to receive our daily sports headlines? Sign up now!

Manage Your Lists