Tuesday, January 2, 2007

Gazette unable to find worker helped by minimum wage increase

The Gazette's top story today is headlined "Increase in base wage will hurt some businesses, help some employees."

As is so often the case, the headline doesn't reflect the content of the story. The Gazette failed to find a single worker that it could quote as having been helped by the minimum wage increase.

The article itself is a very good one, and should be read in its entirety in order to understand the interplay of factors in the issue of minimum wages.

There was no problem finding people to quote who say that the increase would hurt both businesses and workers. It also pointed out that an increase in the minimum wage would not have a meaningful effect on any Montana worker trying to live on a minimum wage job.

The reality, as the Gazette reported in more than one story last year, is that outside of the food service industry, where minimum wage workers receive a substantial portion of their wages in tips, it is hard to find any Billings workers who receive the minimum wage, or entry-level jobs that offer minimum wage (even under the new standards.) The proverbial job of flipping burgers certainly doesn't pay minimum wage in Billings. Even summer jobs for teenagers rarely pay minimum wage. This is doubtless true of the state in general.

As the director of the Salvation Army in Billings is quoted as saying, the raise will probably raise the base cost of goods and services in Billings, thus being an overall negative for those with lower incomes.

A respected restaurant owner has already made new menus with higher prices, and the head of the Job Service has this to say:

"The only place I really see it hurting is at bottom rung of the employment ladder.... Employers are really going to be looking hard at whether they need another employee. It may mean there will be fewer entry-level jobs."

Like so many issues pushed by Democrats, the minimum wage increase was driven by the political points to be scored by appealing to emotion -- even though the hard facts point out that it doesn't work. Just like the issue of soaking the "rich" with high income taxes, which was discussed before on these pages, the point is not what pencils out as being best for Montana. Rather, what matters is whether it gives Democrats yet another issue to demagogue.