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Minimum wage hike creates more problems than it solves | My Turn
The Mirror’s very own Mr. Federal Way’s thoughts regarding the $15 per hour minimum wage proposals in the region garnered a fair amount of responses, to say the least.
And while it’s easy to think that an increase in the minimum wage is a good solution to the economic problems that plague many people in our region, it ultimately creates more problems than it solves.
In the simplest economic terms, a minimum wage, (i.e. an arbitrary valuation on the price of labor) excludes given sectors of the workforce automatically. Typically, jobs at the minimum wage level are considered low-skill or no-skill-needed jobs.
Now, that’s not a condemnation of the people who work these jobs, but rather a comment on the value of the labor for those jobs. When a minimum wage is set, those who have low-skill, no-skill or little-to-no-job experience are the ones excluded, oftentimes leading to chronic unemployment in those groups.
Don’t believe me? Well, lets take a look at how youth unemployment is doing in Western Washington in the last five years.
In a February 2012 report generated by United Way King County, United Way found that “large numbers of youth are leaving high school before they get their diploma and are entering the workforce with no skills and limited education … they are not equipped for adult employment and are therefore vulnerable to poverty and criminal activities.”
That report continues: “Unemployment rates for youth and young adults (ages 16-29) are the highest they have been since World War II.”
So, here in King County, we already have a dynamic of under-skilled and under-educated youth heading into the workforce. Set that minimum wage to $15 per hour and guess what? Those kids will have one hell of a time ever getting that first job to get them that desperately needed job experience.
But what are the actual numbers? This question was a little tougher to track down, but the Seattle Times, in a July 18, 2012 report, discovered that, according to US Census Bureau Statistics compiled in 2010, the youth unemployment rate in King County was 25.5 percent.
That report also notes that our state as a whole (with one of the highest minimum wage rates) had a 32.9 percent youth unemployment rate in 2011, leaving only four states above Washington with higher youth unemployment rates that year.
So again, when the price of labor is arbitrarily set to some random amount, the ripples of that rate spread far beyond just the workers we imagine it will help.
Some of those ripples can already be seen in SeaTac, with a Dec. 30, 2013 Fox News report noting that “one (employer) has told a trade group it is going to close one of its two restaurants, eliminating 200 jobs.”
A developer who already owns three hotels in SeaTac told the Fox News reporter that a plan to build a fourth hotel there is “being shelved” because of the “uncertainty” the new minimum wage is creating for the marketplace and the labor pool in our neighbor to the north.
Things are tough all around, I know this. I’m not writing from some place of privilege, believe you me. As it stands right now, those workers who the $15 per hour minimum wage rate apply to in SeaTac are actually making a higher hourly wage than I am as I sit at my computer and type these words.
All that being said, the only thing I can continue to reiterate is that raising that minimum wage, whether it’s in SeaTac or Seattle, or anywhere else for that matter, will hurt more than it helps in the long run. And, as Mr. Federal Way pointed out, especially in some of those industries, the workers that the minimum wage advocates fight so fiercely for, will likely no longer have a job.