Alicia Petska of the Roanoke Times published an article over the weekend about the position of candidates in the 21st State Senate District on the minimum wage. And as usual, state Senator John Edwards (D-Roanoke) gave the haggard, liberal argument for an increase:
“Raising the minimum wage is an economic and humanitarian need that Virginia needs to act on.”
“People shouldn’t have to live under the federal poverty line in America if they’re working full time,” Edwards said to about 30 supporters at a campaign event hosted by Delegate Sam Rasoul’s…office.
“We’re talking about the working poor, people who work hard every day, but cannot make ends meet,” he said.
Edwards, who’s in a contested race for re-election, backed a minimum wage bill in 2014 that would have raised the rate from $7.25 to $9.25 over two years.
His Republican opponent, Nancy Dye, a retired surgeon who co-founded a business making medical devices, said in a statement that a minimum wage hike would only hurt Virginia’s small businesses:
“As a former small business owner, I understand that legislative attempts to increase the minimum wage have a disproportionately negative affect on our region’s small businesses. Businesses — especially small businesses — only have so much money,” she said. “The people hurt the most are those entering the workforce and gaining the skills to advance in the workplace.”
Let’s break down this rebuttal to Edwards’ argument.
1. Wages are a price
Every economic conservative should read Henry Hazlitt’s Economics in One Lesson at some point in their life. It’s online, and there is no reason that you cannot read this book in two days. Hazlitt was an editorialist of the Austrian Economics persuasion, and his chapter on the minimum wage should be required reading for conservatives of all stripes.
Here’s an exerpt:
“This ought not to be surprising, for a wage is, in fact, a price. It is unfortunate for clarity of economic thinking that the price of labor’s services should have received an entirely different name from other prices. This has prevented most people from recognizing that the same principles govern both.
Thinking has become so emotional and so politically biased on the subject of wages that in most discussions of them the plainest principles are ignored. People who would be among the first to deny that prosperity could be brought about by artificially boosting prices, people who would be among the first to point out that minimum price laws might be most harmful to the very industries they were designed to help, will nevertheless advocate minimum wage laws, and denounce opponents of them, without misgivings….”
All due respect to the Gentleman from Roanoke, Democrats have never wanted to argue the logical position on minimum wage. Instead, Democrats just want to tug at the heartstrings of the misinformed voter. As my good friend and editor, Shaun Kenney, would say, “I feel all the feels!”
I would ask my friends in the Democratic Party to look at facts. Yes, workers who only have minimum wage jobs will not have the means to support themselves and their families in the manner they would like. But, a minimum wage job is not supposed to be the pinnacle of someone’s career; it is supposed to be the starting point. Over time, employees who work these positions gain the skills necessary to move up both the professional and the economic ladder. Ironically, raising the minimum wage would discourage this exact kind of upward social and economic mobility because it would de-incentivize employers from hiring and promoting their employees.
2. Minimum wage laws price low skill workers and consumers out of the market.
“It may be thought that if the law forces the payment of a higher wage in a given industry, that industry can then charge higher prices for its product, so that the burden of paying the higher wage is merely shifted to consumers. Such shifts, however, are not easily made, nor are the consequences of artificial wage-raising so easily escaped.”
A higher price for the product may not be possible: it may merely drive consumers to the equivalent imported products or to some other substitute. Or, if consumers continue to buy the product of the industry in which wages have been raised, the higher price will cause them to buy less of it. On the other hand, if the price of the product is not raised, marginal producers in the industry will be driven out of business; so that reduced production and consequent unemployment will merely be brought about in another way.
Therefore, while some workers may benefit from the higher range, just as many will be thrown out of employment altogether.
Moreover, a nice problem will be raised by the relief program designed to take care of the unemployment caused by the minimum wage law. By a minimum wage of, say, $2.65 an hour, we have forbidden anyone to work forty hours in a week for less than $106.[5] Suppose we offer only $70 a week on relief. This means that we have forbidden a man to be usefully employed at, say, $90 a week, in order that we may support him at $70 a week in idleness. We have deprived society of the value of his services. We have deprived the man of the independence and self-respect that come from self-support, even at a low level, and from performing wanted work, at the same time as we have lowered what the man could have received by his own efforts.
These consequences follow as long as the weekly relief payment is a penny less than $106. Yet the higher we make the relief payment, the worse we make the situation in other respects. If we offer $106 for relief, then we offer many men just as much for not working as for working. Moreover, whatever the sum we offer for relief, we create a situation in which everyone is working only for the difference between his wages and the amount of the relief. If the relief is $106 a week, for example, workers offered a wage of $2.75 an hour, or $110 a week, are in fact, as they see it, being asked to work for only $4 a week—for they can get the rest without doing anything.”
The real world application of Hazlitt’s theories are currently being seen in Seattle. In a recent Fox News report, the minimum wage hike in Seattle is actually costing consumers more. Employees are also asking employers for fewer hours of work to maintain the same level of government food assistance and welfare.
According to the report, most restaurants are now imposing a 15 percent surcharge. What does this do? It prices the consumer out of the market for that particular restaurant, which then causes the owner to either close their business due to lack of customers or cut hours for employees. Both negatively harm the economy.
Second, employees are asking their employers to cut their hours so they can maintain government assistance. Wait…isn’t the whole point of raising the minimum wage to get people OFF government assistance? The Fox report also states that welfare enrollment in Seattle has barely dropped.
3. West Virginia? He compared us to West Virginia?
Edwards said workers need fair wages and noted that 29 states have a higher minimum wage than Virginia, which observes the federally required minimum: “West Virginia has a higher minimum wage than Virginia, did you know that?” West Virginia pays $8 an hour, according to the U.S. Department of Labor.
According to the most recent data from the Department of Labor and the Bureau of Labor Statistics, West Virginia has the highest rate of unemployment, IN THE NATION . West Virginia is also one of only two states in the country with a labor participation rate under 50 percent, according to the National Center for Policy Analysis. The median household income for the state of West Virginia is $12,000 dollars below the national average. Furthermore, the median value of owner occupied housing units is $78,000 lower than the national average.
Is this what John Edwards wants to happen to the Roanoke Valley and the commonwealth of Virginia? More economic hardship by means of a minimum wage increase?
Thankfully, we have a choice to retire Senator Edwards in November.
