Raise the minimum wage

As the Senate considers legislation to raise the minimum wage we can expect to hear business groups moaning and complaining that any increase in the minimum wage will shutter businesses and destroy our economy.

The New York Times, however, took an interesting look at what is happening between Washington state and Idaho. Washington not only has the highest minimum wage in the nation at $7.93 per hour but they indexed that wage to inflation so that the minimum wage in that state goes up every year. Idaho, meanwhile, has one of the lowest minimum wages in the country at $5.15 per hour.

So what has happened? The Times reports,

"Business owners say they have had to increase prices somewhat to keep up. But both states are among the nation’s leaders in the growth of jobs and personal income, suggesting that an increase in the minimum wage has not hurt the overall economy.

“We’re paying the highest wage we’ve ever had to pay, and our business is still up more than 11 percent over last year,” said Tom Singleton, who manages a Papa Murphy’s takeout pizza store here, with 13 employees.

His store is flooded with job applicants from Idaho, Mr. Singleton said. Like other business managers in Washington, he said he had less turnover because the jobs paid more.

By contrast, an Idaho restaurant owner, Rob Elder, said he paid more than the minimum wage because he could not find anyone to work for the Idaho minimum at his Post Falls restaurant, the Hot Rod Cafe.

“At $5.15 an hour, I get zero applicants — or maybe a guy with one leg who wouldn’t pass a drug test and wouldn’t show up on Saturday night because he wants to get drunk with his buddies,” Mr. Elder said."

Businesses have not fled from Washington to Idaho. As a matter of fact, Washington business groups that opposed the increase in the minimum wage years ago now say that the Federal government ought to raise the wage nationally.

For all the bravado one hears from the business lobby about capitalism and competition, I've found that frequently business groups base their policy positions on fear of change -- even when there is solid evidence that their fear is unfounded. That's too bad. Imagine how strong our country would be if the business community embraced comptetition and change instead of trying to hide from it.