Democrats in the House of Representatives have an ambitious list of proposals they will try to ram through in their first 100 hours at the controls. While some are worthwhile, even laudable, others are counterproductive. However, the one proposal that is most likely to pass both houses of Congress and be signed into law by President Bush – raising the minimum wage – represents the worst kind of political pandering.In the run-up to the 2006 election, the woman who was to become House speaker, Nancy Pelosi, lamented, “In 100 hours, the top CEOs will earn an average of $2 million each. In 100 hours, a minimum-wage worker working 8 hours a day will earn $171.67.”
When it comes to class warfare, Pelosi is a five star general. The point she was trying to make – just in case you missed it – is that the poor in this country are poor because our CEOs are rich.
What do the earnings of America’s top CEOs have to do with minimum-wage jobs? Plenty!
The reality is that many of the CEOs Pelosi reviles began their working careers earning the minimum wage. Furthermore, those minimum-wage jobs gave these people valuable work experience, which they put to good use. That’s because a minimum-wage job is the first rung on the employment ladder.
Yes, it is true. The federal minimum wage is $5.15 an hour, and it has not increased in the past nine years; however, those taking minimum-wage jobs have done quite well without any help from the government.
Ronald Reagan could have been referring to the minimum wage when he told us, “Government is the problem, not the solution.” The minimum wage was meant to be a training wage. When an employer takes on a minimum-wage worker, that employer expects to spend extra time with that worker until the worker develops the skills to be fully productive. The reality is that minimum-wage workers who work full time and increase their skills do not stay at the minimum wage long.
Unfortunately, when the minimum wage goes up, those who lack skills and work experience – the ones who need these jobs the most – are the ones who get hurt. When the cost of training a worker becomes too expensive, many entry-level jobs simply go away.
Last June, Sen. Edward Kennedy, another class warfare general opined, “There’s no state in America where $5.15 an hour meets the basic needs of a working family. We have waited too long to give these hardworking men and women a raise.” Kennedy would have us believe that there are millions of people working to support families that have been trapped at the federal minimum wage for the past nine years. He knows better.
Forty percent of those minimum-wage earners received a raise within four months. Two-thirds received raises within a year. The median increase for those first year workers who began at the minimum-wage level was 10 percent. That increase was more than five times that of other workers.
To be sure, there are workers who stay at minimum-wage jobs for good reasons. Workers in the restaurant and other service industries often make much more in tips than they do in a salary. Also, those who prefer part-time work often take minimum-wage jobs, with no thought of advancement, because they like the flexibility.
Statistics show that most minimum-wage earners are students or retirees working part-time and, contrary to popular opinion, they are not poor. In fact, the average family income of a minimum-wage earner is almost $50,000 per year.
Would these people gladly accept a minimum-wage raise? Of course! Who would turn down Santa Claus?
It should be no surprise that the biggest supporters of a minimum-wage increase are unions. Not only do union leaders use a hike in the minimum wage as an excuse to demand even higher wages for their members, they know that minimum-wage hikes tend to block low-wage workers from competing with union members who have higher skill levels.
Yes, the federal government and the states can mandate higher wages, but they cannot dictate who gets hired. When companies are forced to pay higher wages they go for skilled, not unskilled, workers.
The minimum-wage hike is not about helping the poor or eliminating poverty. It’s about helping “fat cat” unions get fatter. Why? The unions, in turn, show their appreciation to these bleeding heart politicians in the form of hefty amounts of campaign cash. That’s what this pandering is all about!
It’s a cheap, dirty political trick. Don’t be fooled.