Our Voice: Minimum wage law hurts state's economic growth

January 5, 2014 

Washington once again leads the nation in something questionable: the highest mandated minimum wage.

As of Jan. 1, our state's minimum wage went up 13 cents to $9.32 an hour.

While at first blush that may sound like a great thing for workers eking out a living at minimum wage jobs, the effect on the very businesses that employ them is consequential.

Businesses big and -- especially -- small have felt the impact of Washington's high minimum wage for years and have seen no relief.

The situation has the opposite result: In order to pay people more money, they have to pay fewer people. That means fewer jobs.

Proponents of higher wages argue that people can't survive on minimum wage, and that adjusted for inflation it should be something more along the lines of $16 an hour.

But, let's face it, minimum-wage work was intended to be an entry point to the job market, a means to an end intended to help people get by while they acquire skills needed to make a sufficient living in the long term.

"Historically, minimum wage jobs have been the first rung on the ladder for millions of young people entering the job market -- a place to learn work skills and gain experience," wrote now retired Association of Washington Business president Don Brunell. "Minimum wage jobs were never intended to be a career, but rather the beginning of a career path."

The Deseret News in Salt Lake City takes it a step further in the wake of protests over wages at fast food restaurants: "The free market rewards workers who obtain skills, which is a strong incentive toward education and training. That may seem cruel for those who, for various reasons, are forced into minimum-wage jobs, but government-imposed wage levels lead to unintended consequences."

The message was plain: If restaurants were forced to raise minimum wage to the level workers demanded, they'd have to increase food prices to consumers or automate and streamline the workflow to eliminate jobs in order to absorb the cost increase.

And therein lies the problem -- one that could be translated to any type of business facing ever-increasing government-mandated wage requirements: Increase revenue or cut costs. And that often means eliminating jobs.

While we are sympathetic to those struggling to earn a living, we also are sympathetic to the business climate, especially the one of our home state.

Washington is already a challenging place to do business. Just look at the fight over Boeings 777X project in the Puget Sound. Boeing has shown how displeased it is with Washington's business climate for years, beginning by moving its own headquarters to another state, then shifting more and more work to friendlier environments. States tripped over themselves to offer incentives to get the 777X job after the machinists union rejected Boeing's first offer. Our state's leaders actually did their job by extending some benefits for aerospace manufacturers to try to keep the business here. It was up to the union to take a second vote last week to concede some issues or watch jobs disappear in a few years.

In most cases, our state seems uninterested in attracting more businesses or retaining the ones it has. Legislation continues to make it tougher and tougher for the ones rooted here already.

If we don't have a strong business climate, we don't have jobs. If that's the case, it doesn't really matter what minimum wage is required.

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