Wednesday, February 9

More on the Minimum Wage

Matt Singer and I are talking about the minimum wage here.

Wednesday, February 2

Ever Wonder What Happens to Low-Skill Jobs When the Minimum Wage Increases?

With the legislature considering a minimum wage hike, I have been considering a post to put in my 2¢. Personally, I think that any hike is a very bad idea.

Why? Well, the net effect is to eliminate low-skilled, entry-level jobs from the workforce. As the productivity of higher-paid, higher-skilled employees increases, an employer will just not fill a minimum wage position, if the wage that must be paid for that position is greater than the benefit that will be accrued by the employer.

The traditional response to this view is to point out that there are a number of menial jobs that must be performed at any workplace. However, that is getting less and less true.

Today, when you talk to a customer service rep on the phone, the odds are that you are speaking to someone in a different state or in many cases even a different country. In fact, our low wage base is what brought telecommunication companies, like NEW, to Great Falls.

Nothing illustrates this better than this news report from the KIRO-TV station in Seattle. Apparently, a McDonald's in Oregon found a unique way of circumventing Oregon's $7.25/hour minimum wage -- they patched all conversations through their drive through to order-takers in Grand Forks, ND (a state with a $5.15/hour minimum wage). Is that the sort of thing that backer's of the minimum wage hike want here?

Thanks to Craig at mtpolitics.net for finding that gem or an article. It was originally posted on his blog here.