Debunking the minimum wage myth
One of the great myths of the late 20th century and our current century has been that raising the minimum wage will automatically throw poor people out of work and result in fewer job opportunities overall. This is an article of faith with Chambers of Commerce, small business groups, many economists, and of course, the Bush Administration.
The trouble is the myth just doesn't hold up when there is a real life place to test its impact. A story in the New York Times today compares towns along the state line between Washington and Idaho. Washington has one of the highest minimum wages in the country, $7.93, and Idaho the lowest, the current Federal minimum wage of $5.15. Turns out that low-wage, i.e., fast-food businesses on the Washington side are booming, defying dire predictions in the usual quarters that businesses would "flee to Idaho" and its rock-bottom minimum.
Businesses in Washington say they've raised prices modestly to pay the higher wages, but the public hasn't complained. Teenagers in Idaho are voting with their feet and taking jobs across the border in Washington to get the higher wages. Washington businesses report lower turnover because of the higher wages. Idaho businesses complain they get bottom-of-the-barrel job applicants, and are being forced to raised their wages to compete.
It's always great to see conservative Republican conventional wisdom turned on its head. Now lets hope the U.S. Senate takes up the minimum wage increase bll passed by the House and speedily approves it. The big question that remains is whether President Bush will veto a higher minimum wage. You know, stick his thumb in the public eye to protect his wealthy supporters. Will he do that? Hmmmmm.