Question: Should Arizona lower minimum wage for workers under 22?
Feeling the economic pinch? Save your money while you still can.
The Arizona House is considering a bill to lower the minimum wage to $5.44 an hour for workers under age 22, according to ABC15.com. The bill seeks to address unemployment among young workers.
Progressives have long called opposition to minimum wage neglect of the welfare of workers. They point out that minimum wages prevent companies from paying arbitrarily low amounts, and cite the fact that everyone in the economy earns at least the current minimum wage of $7.25.
But according to the Bureau of Labor Statistics, only 286,000 workers earned minimum wage in 2008. That’s 0.22 percent of the workforce. Less than one in 400. Companies cannot dictate wages. There are forces far more powerful than the government in play, and interfering with them does more harm than good.
A company only hires someone for a job if it makes more money from labor than it has to pay in compensation. It also has to pay very close attention to what it makes, or else a competitor can offer a slightly higher wage and get good labor for cheap, making money. Essentially, this means that every worker is paid according to the value they contribute to their employer.
Everyone making $7.25 now contributes at least that much in productivity. So if the minimum wage is reduced for those 22 and under, companies trying to reduce wages will have their employees stolen by others looking to make a profit. So, in that sense, things will pretty much stay as they are. But there is another situation to account for.
Suppose you are 20 and are not such a good worker. In fact, your labor only contributes $6 to whoever decides to hire you. The problem is that no one will do so; they are required to pay you $7.25 and would lose money. But what if this bill passes? An employer would be happy to hire you at $5.75, taking you away from the ranks of unemployed. Ironically, it is the lowliest workers, whom minimum wage advocates say they are helping, that get the short end of the government’s stick.
Rep. Chad Campbell, D-Phoenix, doesn’t agree. Though he hoped to work with the sponsor of the bill “to turn it into something positive” focusing on work and education in high school, he said he would not support any bill that lowers the minimum wage.
“People are having a hard enough time making ends meet. Lowering the minimum wage is not the answer,” Campbell said.
It’s nice to think that just by making laws we can take things from evil corporations and give them to hard working Arizonans, but saying that minimum wage protects workers doesn’t make it true. It’s time to make decisions based on logic and a clear goal, not on fear of anecdotes that ignore huge secondary effects.
Ben is being strangled by government. Send help to bjmorin@asu.edu
