So, Should We REALLY Raise the Minimum Wage to $15 Per Hour?

Currently, the federal minimum wage stands at $7.25 and hasn’t changed since 2009. The push to move it to $15 (where did they come up with THAT number? Why not $20? Why not $100?) has gained steam of late, with California and New York becoming the first states to pass legislation to push their minimum wage to this point for all employers by 2022.

The “Fight for 15” movement is no small part of this, with thousands of demonstrators taking time off from their fryers and cash registers to participate in protests across the country. Their demands have become a part of the Democratic primary debate and even the Bernie Sanders platform.

The convergence of Black Lives Matter and “Fight for 15” in many of these protests also speaks to the volatility of the issue. Unfortunately, many minimum wage workers are low-skilled minorities who struggle to make ends meet. It’s easy for many of them to see this crusade as an extension of the Civil Rights movements of yesteryear.

Childcare worker Dawn ONeal travelled from New York to participate in a BLM / Fight for 15 rally in Atlanta. According to ONeal,  “When we look at communities that are higher in crime, they have more police violence of course, but it’s because of economic conditions. People are hungry. People need to feed their families, and we can’t survive on wages like $7.25 and $8.50 in today’s economy. A lot of desperate times, unfortunately, call for desperate measures.”

It’s certainly easy to sympathize with low-wage workers, but its also easy to point the finger. On the one hand, as all of us in the staffing industry know because we struggle every day to find willing workers, theoretically at least anyone with drive, smarts, and initiative can start out on the bottom rung and work themselves up any ladder. These jobs, after all, aren’t meant to be a permanent career.

On the other hand, and I mean this in the most respectful way, there will always be a segment of society that, frankly, isn’t capable of more than a low-skilled job. For them, entry-level will always be home. Its not always a character flaw, just reality. After all, didn’t Jesus Himself say the poor would always be with us? What does society do with these folks when their labor just isn’t WORTH a living wage? (More on this later.)

But come hell or high water, dang it, were going to MAKE labor, any labor, worth what we want it to be worth, market be damned. And we’re sure it’s going to turn out really well.

When it comes to hyper-progressive tinkering, California and New York wrote the book, so its no surprise this experiment will happen in those states first. And maybe, in the grand scheme of things, that’s a good thing, because the rest of us will get front-row seats to the economic devastation that’s about to unfold.

It’s not that low wages, in and of themselves, are good. In fact, I’ve argued extensively, both here at Staffing Talk and to our clients directly, that there are costs to paying extremely low wages that often go deeper than the perceived benefits of saving a few bucks on the bottom line.

That applies, of course, only if its economically possible for a company to do so.

But artificially raising the minimum wage by brute force, which is essentially what government is and does, doesn’t take economic factors into account. Instead, it ignores facts and logic in favor of pie-in-the-sky fantasies with no basis whatsoever in reality. It is Paul Bunyan’s axe trying to kill an ant hiding in the middle of a glass figurine collection.

Here is the one key reason why – Companies that cannot afford it will NOT pay it.

They just won’t. Period. End of story.

The “Fight for 15” protestors can whine and scream throw temper tantrums because they want $15 per hour, or $100 per hour, or free slurpies, or paid vacations for taking care of a sick pet. They can even dupe the liberal do-gooder legislatures of more states besides New York and California to pass a law that says it’s so. But if companies can’t pay it, they won’t pay it. You can’t squeeze water from a rock

Oh, they won’t keep employing workers for $9 per hour. That would be illegal. They just won’t employ workers at all. Not here in America anyway. They’ll look for ways to automate and eliminate human jobs. They’ll close down because the cost of labor is more than they can get for the goods they produce. If they can afford it, they’ll move their businesses overseas. (As a general rule I’m against outsourcing, but Guatemalans ain’t got time for silly minimum wage nonsense.)

In a best case scenario, they’ll raise prices and try to compete. This, of course, will result in price increases across the board for middle and lower income families that can least afford it. In fact, some have equated a minimum wage increase to a sales tax that hits lower income earners harder simply because it hits everyone the same.

It means kids who have never worked and need a part-time job to help pay for college won’t be able to find one.

It means small businesses already on the brink of financial ruin will be forced to close.

It means small business who already are a severe disadvantages due to economies of scale will be shut down by the price increases they are forced to make, while giant corporations will be able to lag behind the price curve to force them out.

It means families that can barely afford to make ends meet will see price hikes that could very well put them under.

It means medium and large businesses, realizing that they too will have to pay more to keep their workers commensurate with their skills, will increasingly look to outsourcing as an alternative to closing entirely.

It means companies will be forced to automate or eliminate as many low-skill jobs as possible.

But yeah, fry cooks at Hardees will be making $15 per hour, at least for a while. Great job, “Fight for 15.” You have succeeded in making 2+2=5 for all of ten seconds.

To sum it up and get back to what, indeed, to do with workers who are willing to work but simply aren’t capable of more than an entry-level job, the factors at work to hinder them are so much deeper than greedy companies longing to take advantage of vulnerable workers (although yes, there’s likely an element of that in some sectors). Government, by essentially paying so many people not to work, artificially creates a labor supply problem that likely wouldn’t otherwise exist.

Additionally, we have a ruling elite that has decided that, despite the fact that everyone knows low-wage and low-skilled jobs are on their way out and were going to have a hard time finding a place for the ones we already have – despite these facts, we should import MORE low-skilled workers from the Third World. Workers who will then turn around and, when given the chance, vote themselves freebies until the coffers run dry.

And what happens when the coffers run dry? I don’t think any of us want to find out.

My advice to someone currently working a minimum wage job? Make like this woman at Taco Bell, who basically told “Fight for 15” protesters to go pound sand. Put your nose to the grindstone, work hard, work smart, and work your way up the ladder before it falls out from under all of us.


This post first appeared on Staffing Talk.