Is a higher minimum wage worth crossing the street for?
This morning NPR station KPLU took a look at that question by exploring two towns on the Washington/Idaho border. Washington's minimum wage is roughly $2/hr more than Idaho's. Why does that not surprise me?
The reporter visited a MacDonald's that moved from one side of the street (Idaho) to the other (Washington) for the sole purpose of building a fancier store. The franchise owner says:
“Just because we've expanded our business shows that we're growing our business,” he said. “And so with growing our business, I need more employees. So we've grown substantially I'd say in the last year and a half.”The story also looks at some research done a few years back that found most of reasons for not raising minimum wage don't wash. They used communities on either side of the border for their "petri dish". For one thing, higher wages lead to less turnover. Granted there are other factors to consider when working to retain employees, but providing a living wage seems like a no-brainer. The study also found that a higher minimum wage
"...leads employers to invest more in worker training, which increases productivity."I decided to Google around and find the counter-argument and came across one right-winger on the web (there are many, I know, but I did a quick search and grabbed one) who argues that the minimum wage is intended to be a "learning wage". Employers hire unskilled workers, then move them up the pay scale as they gain skills. And in the end, they can move on to other jobs.
Sounds like a good plan, but when I worked in a fast-food place years ago, I was hired at the minimum wage with a promise of a ten cent raise after six months if I received a good review. Meaning I could handle the menial tasks and impatient customers and was willing to hang on for at least six months in spite of it all. I needed the money. That ten cent raise was not the carrot.
The other problem with that notion is that people who already have skills take minimum wage jobs when nothing else is available. And students who are paying and/or borrowing money to learn more advanced skills (university, community college, technical institute - take your pick) often take minimum wage jobs for the same reason.
The KPLU story points out one other reason this argument is full of holes:
Right now, Idaho is facing a skills gap challenge. People in the crucial 25-29 age bracket are leaving the state for higher paying jobs elsewhere. Meanwhile, retirees entering the state are pushing up demand in the service sector. Currently, Idaho has the highest share of minimum wage workers in the nation.These workers aren't going far, either:
"Eighteen-thousand people live in Idaho but work in Washington, according to the Idaho Department of Labor."The motivation to ensure that workers don't undersell their labor has nothing to do with job training. The minimum is intended to:
... increases the standard of living of workers, reduces poverty, reduces inequality, boosts morale and forces businesses to be more efficient.
The minimum wage falls short of intentions all over the country. But it looks like when it's raised enough, it's worth crossing the street for.