Minimum wage boost harmful

A group of Michigan House Democrats recently proposed increasing the state's minimum wage to $10. Democrats in the U.S. House are pushing for a similar phased-in increase for the federal minimum wage.
Apr 26, 2013

While that would be a big boost to those working for minimum wage, it would have far-reaching negative effects on the economy in general.

Currently, Michigan’s minimum wage is $7.40; on the federal level, the minimum wage is $7.25.

Those who support the increase say wages have to “catch up” to the rate of inflation, which has slowly eaten away at the minimum wage — a program instituted in the Fair Labor Standards Act signed by President Franklin Roosevelt back in 1938.

Several local seasonal business owners recently said the hike wouldn’t hurt them, as they typically pay more than minimum wage already. Plus, they feel that more money going to workers means more money poured into the economy.

But who are the workers who would benefit the most? According to the U.S. Bureau of Labor Statistics, there are 3.6 million hourly workers in the country who were paid the federal minimum wage or less in 2012.

Minimum wage earners tend to be young. About half were teenagers or young adults under the age of 25. Only 20 percent of all minimum wage workers are family heads or spouses working full-time.

And while some seasonal businesses that sell high-end merchandise can afford to pay employees $10 an hour, there are many businesses that would be severely impacted if the minimum wage took a sudden 35 percent leap.

Grocery stores are a great example. If the minimum wage took a significant jump, they would be forced to raise prices to cover that cost increase. That means everybody would face yet higher prices for food and household goods.

In addition, economic studies show that one significant trend following a minimum wage increase is a reduction in employment.

What it all boils down to is that, while a boost in minimum wage would help a few, it would hurt many others in the form of raised prices and layoffs.

We could understand, and even lend our support, to a reasonable rise in the minimum wage. But a dramatic increase will do more damage than good.

Our Views reflects the majority opinion of the members of the Grand Haven Tribune editorial board: Kevin Hook, Cheryl Welch, Matt DeYoung, Alex Doty and Fred VandenBrand. What do you think? E-mail us a letter to the editor to news@grandhaventribune.com or log-in to our website and leave a comment below.

Comments

DJ49456

Hmmm! you know whats really funny about this, Businesses like grocery stores have been saying this for years "Oh well if the minimum wage goes up then we will be forced to raise our prices and lay off several employees" Let's get to reality here. Most things are already expensive even at the current minimum wage status so get over it people. Those of you who have full time jobs with benefits should not be whining about this when there are those who are working at minimum who have a hard time feeding themselves and their families. Oh and let's not forget that your all expect your employee's to work like slaves. Just deal with it.. It's going to happen eventually, so keep thinking of ways to rob society penny-less.. lets see how long your business doors stay open.

The Manitou

It's a vicious circle.

zwesterhouse

I honestly don't know how a business can find good help for $10/hr. These factories in Grand Haven use and abuse temp service employees. They walk off the jobs usually by first break anyway. Being a cashier now is dangerous to your health as we seen in the abduction incident. One guy I know is a CNC programmer making $22 and hour on a temp service/no benefits. The company insists its only a $10 an hour job. They have not had any responses or interviewees since 2007 for CNC/toolmaker programmer - Well I wonder why???? So the guy is now a "permanent temporary employee" go figure?????

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