Why is this man smiling?
By Rebecca Oyler
It’s important to look at who put their name on the letter and how representative it is of not only economists, but stakeholders on all sides of this issue.
That includes small business owners who would be required to endure a more than a 100 percent increase in wages. The letter and the governor’s citing of it are purely political.
Although some of the signatories of this letter calling for a $15 minimum wage are economists, including several Marxists, many are professors in fields such as sociology, psychology, criminal justice, anthropology, and urban affairs.
These academics’ writings, expertise, and experience, include topics such as inequality, class and gender issues, and worker wellbeing.
The lead signatory worked for Democrat administrations in Washington. Several signers are employees of organizations that regularly advocate for social justice issues. One says it believes every working person deserves “fair pay”, and another group seeking public discussion on an “equitable” Pennsylvania economy gets a big chunk of funding from unions.
We all know that economists’ opinions vary widely. Another study done in the last two months on the $15 federal minimum wage bill surveying 197 US economists found that 74 percent opposed it. Even some Pennsylvania economists, academics who don’t support a $15 minimum wage, testified at a recent hearing at the state Capitol.
Rather than considering the opinions of about three dozen economists and academics as a “tipping point” to justify a $15 minimum wage, it’s critical for lawmakers and Wolf to examine whether such a policy would have serious ramifications, especially for those at the lower end of the wage scale.
NFIB research in late January, using economic forecasting and analysis, found a federal $15 wage would reduce private sector employment nationally by over 1.6 million jobs and produce a cumulative U.S. real output loss of more than $2 trillion. These job losses will most hurt those who are trying to get their first job or are re-entering the job market.
It may not seem surprising that a survey of NFIB small business members across the county shows 91 percent oppose a $15 federal minimum wage. But, understanding the current labor market helps make clear why they don’t think that a big jump in the wage threshold is a good policy.
With the current labor shortage, employers are paying higher wages and also taking steps to keep their current employees.
More than a third of small business owners nationally report increasing employee compensation, and others plan to do the same. The problem with a $15 minimum wage is that unskilled or inexperienced people—those most in need of job experience–can’t contribute enough to the employer to justify the cost of hiring them at all. These jobs will be eliminated to pay for higher wages for more experienced employees.
A much better policy solution would be getting those people trained for the existing jobs that businesses are already finding difficult to fill and require more qualifications. If the goal is to lift worker wages, this should be the focus of policymaker efforts.
Rebecca Oyler is the legislative director for NFIB, an association that advocates on 12,500 small and independent businesses in Pennsylvania. She writes from Harrisburg.
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