My wife always encourages me to do personal interest columns and to avoid the political topics because she says that political ones generate nothing but acrimony and, besides, who wants to hear what I have to say about political issues. Sorry, Kathy, but the whole minimum wage issue begs for my opinion. For those of you who agree with my wife or disagree with my admitted conservative view point, this isn't the column for you.
I see the minimum wage increase as an anti-small local business measure. Of course, we have heard that it will force the huge companies to pay their downtrodden workers a “fairer” wage. Walmart, McDonald's and Amazon are the favored and oft-mentioned whipping boys. Generally speaking, they will survive the wage increase by work shifting to middle management personnel who are paid a much higher wage than minimum. In their cases, workers will be displaced or not replaced as they rationalize their work forces to compensate for any increases.
It is also argued that many states that have implemented an increase in the minimum wage are the very states that have exhibited above normal growth compared to the other states that have not increased the minimum. The relationship in this comparison is not entirely clear. Maybe these states would have demonstrated the same growth without the increase in the minimum wage? Maybe these states have local economies that are robust enough to cause a demand on labor such that they have wage levels way beyond the federal minimum so any an increase is irrelevant and non-affective to local employers?
It is also presented as a justification that the increase in the minimum wage is the morally right thing to do and it will get people closer to a “living wage.” It might be argued that a very small percentage of minimum wage workers are principal wage earners and, further, that they are more than entry level employees. There is no quantifiable measure for what a “living wage” is or that any employee should receive that without an increase in production or value to his employer.
In our small business, our entry level employees begin at a level above the current federal and state minimums by far. Assuming their work justifies an increase, they are given an increase usually within 90 days. Employer and employee realize a fundamental principal that increased production will result in increased pay per hour. Of course, that is the main argument against raising the federal and state minimums. Employees are not required to do more or better work in order to secure a better wage and that results in a detrimental proposition for any employer especially the smaller, local business that relies heavily on the type of employer who is getting paid the minimum wage.
Let's consider who will be affected most by the increase. It's the person down the street that has the small restaurant, landscaping, gym or cleaning business who will take it in the throat and is unwilling or unable to increase his prices. That person's business has been savaged by involuntary closures and limited-use restrictions. He or she will either have to displace someone and do more or somehow automate the processes to avoid using non-skilled labor. That automation comes at an expense and is not easily afforded by many small businesses.
For the rest of us who have traditionally paid above any minimum, relational pressure will be exerted to keep our employees at the same level above the minimum. Again, with no increase in productivity, the cost will be borne by only us and our customers (if we can get an increase in pricing.) We will make the same hard decisions that others will have to make in displacement or replacement. Those are difficult decisions for both employer and employee. We will have to replace entry level employees and ask more from those who are left. The Office of Management and Budget predicts that nearly 4 million jobs will be eliminated.
I am amused that the most aggressive proponents for increases in the minimum wage are those who have generally never made a payroll. Those of us who have sacrificed our wages to employ another person are the very same ones who are asking for moderation with mandated wages. I guess anything is within the realm of possibility if someone else has to do it and that “person is not me, but thee.” That seems to be a very popular belief among some of our politicians.
Gary DeSantis is a Meadville resident and author of a book titled “The 6th Floor.”