Opinion
Min. wage hike: Job creator or crusher?
President Barack Obama has called for a federal minimum wage of $10.10 an hour as a standard for new federal contracts, but fast-food workers and other low-income earners want their pay raised to $15 an hour. Federal law requires most employers in Georgia pay at least $7.25 per hour. Debate regarding the economic consequences of a wage increase continue as does the labor movement’s push for an increase.
Would a minimum wage hike be a job creator or job crusher? Here’s a compilation of observations from opponents who lean toward the latter view.
- James Sherk, research fellow at The Heritage Foundation: "The Service Employees International Union (SEIU) has launched an expensive PR campaign calling for wages of at least $15 an hour in the fast-food industry. This Fight for 15 is part of a larger SEIU pressure campaign to unionize fast-food restaurants. Hundreds of union activists have staged "walkouts" and protests across the country demanding the higher pay rate. These protests have attracted considerable media attention. However, if the SEIU achieved its stated goal, it would hurt the budgets of millions of moderate-income Americans. Artificially inflating wages would substantially increase fast-food restaurants' total costs — labor makes up a considerable portion of their budget. The Bureau of Labor Statistics reports the average cook in a fast-food restaurant earned $9.04 an hour in 2013. The SEIU's push for $15 an hour would consequently raise fast-food wages by at least 66 percent. Paying $15 an hour would raise fast-food restaurants' total costs by approximately 15 percent."
- Kyle Jackson, state director of the National Federation of Independent Business: "The minimum wage disproportionately hurts smaller employers because smaller employers have less of an ability to absorb cost increases, and this is probably the worst possible time we could be having a discussion about the minimum wage, because most small employers are just now getting back to pre-recession levels in terms of their performance."
- In June, the Georgia Restaurant Association released study results that forecast a potential loss of 21,000 jobs, 12,700 held by women, if the federal minimum wage goes to $10.10 an hour. Conducted by Trinity University labor economist David Macpherson, the study found that about 60,562 state and local government employees in Georgia would be in line for raises, with a $10.10 hourly minimum wage. The cost to taxpayers would be more than $164 million annually, benefits included. "Raising wages is an admirable goal," the study states, "but the evidence suggests that accomplishing this goal with a blunt wage mandate could do more harm than good."
Sources: The Heritage Foundation, WABE, The Atlanta Journal-Constitution.
