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EDITORIAL: Doubling minimum wage a reckless idea


Another fast-food strike came and went Thursday, led by groups such as the Service Employees International Union, Fast Food Forward and Fight For 15, all for the goal of more than doubling the federal minimum wage from $7.25 an hour to a whopping $15 an hour.

It’s astonishing to witness such an economically destructive movement at a time of persistent joblessness. The statewide rate remains the highest in the nation, at 9.3 percent. In the Las Vegas area, it’s 9.4 percent. Worse still, the statewide jobless rate for those ages 16-24 stood at 17 percent at the end of October. Nationally, the 16-24 unemployment rate has hovered around 16 percent.

That 16-24 segment constitutes much of the fast-food workforce. The reason? These are entry-level, low-skill jobs. These jobs were never supposed to provide a so-called “living wage.” As reported by Reason.com’s Nick Gillespie, less than 3 percent of all workers take home $7.25 or less an hour, and half of those who do are 24 years old or younger. Furthermore, in Mr. Gillespie’s report at The Daily Beast website, he notes that 77 percent of minimum wage earners belong to households that are above the poverty line — showing they are the second or even the third earner in those households.

Labor is a commodity, and as such it is subject to the pressures of supply and demand. Right now, as the unemployment, underemployment and labor force participation rates clearly show, there is an oversupply of workers.

Proponents of a massive minimum wage increase believe it will raise living standards. But that vision doesn’t take into account that in most cases, these workers don’t have the skills to justify a $15-an-hour wage. For fast food, in particular, employers will have a new incentive to automate and eliminate jobs. Making $0 per hour is surely not a “living wage.”

“If you’re reading this on the job, take a look around and ask yourself if your workplace could soak up twice its labor costs without seriously trimming the number of employees,” Mr. Gillespie wrote. “While you’re at it, ask yourself if you’re worth twice your current salary.”

The idea that every job should support a middle-class living flies in the face of economic reality. And that reality will get much harsher here and nationwide if a significant minimum wage hike ever gains approval.

 

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