Reasonably well-informed persons know that increasing the minimum wage throws low-wage earners out of work, thereby derailing their dreams and robbing them of opportunity.
Not for the first time, The Wall Street Journal reported last week that in response to increases in the minimum wage in many states, Dave’s Hot Chicken, a national restaurant chain, will soon get rid of its employee dishwashers by switching to automated systems.
This story hits home, since my first step in the journey to move beyond my working-class origins was washing dishes for a restaurant chain, which enabled me to pay my way through college. I was the only one of about a dozen childhood friends to attend college, an opportunity which my parents also did not have. More on that below.
If dramatic hikes in the minimum wage hurt the intended beneficiaries, why does the Left continue to advance this initiative? After all, when large numbers of people support a specific public policy over many years, despite opposition, there’s a reason.
I believe the reason is to signal their own virtue to the real constituency for this misguided initiative – upper-middle-class voters who want to feel better about their relative wealth and educational advantages over working-class and working-poor Americans. After all, such liberal voters constantly speak to the need for economic equality, all the while enjoying and cherishing the benefits of inequality, and they get uncomfortable if they are not able to show that they care for the less fortunate.
It also helps to preserve their illusions that most have no idea what it’s like to work as a janitor, dishwasher, or house-cleaner, have never worked such minimum-wage jobs, and don’t know anyone who has.
I held a number of these jobs when I was a young man, and they helped me escape a rough neighborhood and a dead-end life. The IRS says I earned $1,650 in 1974 as a high school student who washed dishes part-time at a local restaurant; earned $3,508 in 1975 as both a dishwasher and an office filing clerk; and earned $2,803 in 1976 after I enrolled in college and again worked as a filing clerk. I held many more such jobs, including as a janitor and a handy-man’s assistant.
The point was that these small sums enabled me to pay a portion of tuition for college, an expense my parents could not afford for their seven children. I went on to a successful career, but at 15 or 16, I didn’t have anything to offer the world.
And that’s the point. Every wannabee business, and every young would-be employee, needs a competitive advantage in order to get started. A new business will offer a new, better, or less expensive product or service. The strongest advantage held by a young, inexperienced person with no skills is this – they can work for less. When the state mandates a much higher minimum wage, it robs young people of that advantage.
Gov. Josh Shapiro wants to increase the current Pennsylvania minimum wage from $7.25 to $15 per hour, greater than a 100-percent increase in that wage. Yes, it has been 16 years since the minimum wage was last increased, but if the wage had risen in accord with inflation over those 16 years, the wage today would be $10.91 per hour, according to the inflation calculator for the U.S. Bureau of Labor Statistics.
Why do proponents want to increase it by an amount much greater than the inflation rate? Because supporters of the wage hike don’t take its intended beneficiaries seriously. If they did, they would treat them as seriously as they treat nursing aides, bookkeepers, or paralegals. How do we know the Left takes these other occupations more seriously than minimum-wage earners? We know this because if a bill was introduced in the Pennsylvania legislature mandating a 100-percent salary increase for all nursing aides, book-keepers, and paralegals, the Left would laugh and say, “Get serious!”
A better reason supporters can ignore the harms inflicted by minimum-wage increases is that, once the young, unskilled, or unexperienced workers are thrown out of work by the legal requirement of a minimum wage too many small businesses can’t afford, the Left believes – not incorrectly – that the victims can then collect unemployment compensation and, perhaps, welfare, free healthcare insurance, and food stamps.
If you think the sums of money this old-timer made as a young man are insufficient to make any difference today, ask the founders of that fast-food chain mentioned above.
Three childhood friends in their 20s scraped together a grand total of $900 to launch Dave’s Hot Chicken in 2017. Their first location was a parking lot in East Hollywood, using two folding tables and a portable fryer. The firm now owns 270 restaurants in the United States – with four in Pennsylvania and eight in New Jersey – Dubai, and Canada, and has 700 additional locations in the development pipeline.
Let’s be thankful there’s no minimum wage for entrepreneurs.
