Minimum wage hike argument doesn't add up


Add St. Paul, Minn., to the list of cities where fast-food workers are clamoring for a $15-per-hour minimum wage.

The Pioneer Press reported that fast-food workers and community allies rallied for a strike on Labor Day. U.S. Rep. Keith Ellison attended, along with mayoral candidates and members of City Council.

"The CEO of McDonald's is making $9,000 an hour and can probably afford to get by on $6,000 an hour," Ellison said.

That's flawed logic. And it's a poor argument for increasing the minimum wage, which at present stands at $7.75 for small employers and $9.50 for large employers in Minnesota and $7.25 in North Dakota.

Actually, both of those minimum wage rates are too low and should be raised. But they should be increased in small increments over time and not via strong-arm tactics.

Not everybody deserves $15 per hour. Certain jobs — and certain workers — simply aren't worth it. Beyond that, there are many reasons to go slow with large wage increases.

Doubling the minimum wage will result in lost jobs. Both sides of the argument can produce data to back their case, but there is one overriding fact: Businesses will have to find the dollars somewhere, and it often will be by cutting jobs. Fast-food restaurants already are automating positions such as order-takers at drive-up windows.

Consumers will be affected because higher prices are inevitable. Inflation will catch up and harm the lowest wage earners who, in this case, will be those $15-per-hour employees.

It is not fair to business owners, who suddenly and permanently will have to greatly increase their expenses. Ellison shrugs and says the McDonald's CEO can afford it, but what about the owner of a small, single restaurant?

Meanwhile, raising the minimum wage will mean a corresponding increase in pay for skilled workers, who deserve more pay than those with few skills and no degree. That's another burden for business owners.

Raising the minimum wage could decrease Americans' desire for higher education. The best way to ensure a living wage is to earn a degree. It's OK that some choose not to receive special skills training, but they shouldn't be subsidized by business owners for their decision.

Many part-time jobs are seasonal or held by teens. Businesses shouldn't be forced to pay $15 an hour to a 17-year-old busboy.

The solution?

Make steady and fair increases to minimum wage over time, and let the market—not angry mobs—dictate salaries. If more is needed, then expand aid to low-income earners via programs like Earned Income Tax Credits, which provide a credit for every dollar earned by a worker in a low-income household. In effect, the EITC is a wage subsidy, and as the worker's wage increases, the credit becomes smaller. Of course, expansion of EITC is on the backs of taxpayers, so the appetite may not exist.

But it would be fair — and it wouldn't place the burden of a higher standard of living on the backs of business owners.