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The opinions expressed by writers are their own and do not necessarily represent the views of the Cumberland Country Republican Committee.

The False Promises of Minimum Wage Increases

~ written in April, 2017

Aug 20, 2018

When altering an economy by legislation one must consider not only the desired consequences of such action, but also those other undesirable consequences that will result from the action. While well-intentioned people may desire to raise the minimum wage thinking it will benefit workers, and while those currently holding minimum wage positions may be temporarily helped by the immediate increase in pay, the following are some of the undesirable results of the minimum wage increase.

  1. It will be more difficult for those with no experience to find paid employment, as a higher wage will only be justifiable to employers where it dovetails with increased productivity or financial return.  It is already the case that unemployment in the 16-24 age bracket dramatically exceeds that of workers with more experience.  Raising the cost of young workers will lead to fewer opportunities for paid on-the-job training, or will encourage more creative uses of unpaid internships.  
     
  2. Persons on fixed incomes that do not increase with the minimum wage will see their purchasing power decline.  To accommodate the mandate of a higher minimum wage, some businesses will increase prices.  Increases in prices by some will ease pressure on others to keep prices low, resulting in broader price increases.  Ultimately, it is the poor - precisely those that an increase in the minimum wage purports to help - who will be the hardest hit by these changes.
     
  3. Smaller businesses that cannot as readily bear the burden of mandated higher wages are put at a further competitive disadvantage to their larger counterparts, ultimately resulting in less competition and potentially fewer jobs.  I note that some large businesses and labor groups express support for minimum wage increases while they already pay, or their members are already paid, well above the minimum wage.  Who do they seek to benefit?

Surrounding this issue, proponents often repeat the mantra that all workers be paid at a “living wage.”  However, there are some jobs which, while important, will never in a 40-hour week justifiably command in the eyes of employers or consumers wages sufficient to provide for all the needs of a family.  It is unfortunate that Maine’s economy suffers from a dearth of well-paying jobs and that Maine’s median income is the lowest among the New England states.  Rather than mandating increased wages for entry-level and “low-skilled” (as that term is used by the U.S. Department of Labor) positions in an attempt to make these jobs the equivalent of jobs for primary breadwinners in a family, the Legislature must create an economic environment that supports the creation of “living wage” careers.  Doing the former may help a few while it hurts many more, but doing the latter will help not only increase wages for some, but increase opportunities for all.

John H. Doyle is an attorney, farmer and father of five young children. A graduate of the College of William and Mary and the University of Virginia School of Law, John launched his legal career in the corporate and securities group of a large law firm in Washington, DC, before starting his own practice representing technology companies as in-house counsel. Along the way John married his high school sweetheart, Joan, who brought him back to Maine; the place her family has called home since before the Revolutionary War. John, Joan and their children now carry on the tradition of farming at the historic family homestead.

 

Next CCRC General Meeting

January CCRC Meeting:
Tue, January 19th, 6:30 social, 7:00pm Meeting.
This meeting will be via Zoom and Phone.
Please email chair@ccrcme.com for connection details.

Events

Cumberland County Virtual Golf Tournament
Lincoln Club Dinner with Senator Susan Collins as Keynote Speaker, Fri, 2/7/2020
Event: Why Socialism Would Destroy America’s Economy & Freedoms