Often lost in the debate over the minimum wage is a simple fact of economics: If you wish to improve your earning power, improve your skills. Developing skills that are valuable to employers — whether through education or experience or natural talent — is the surest way to increase your income. That might appear to be painfully obvious. Yet it bears repeating as discussion grows about raising the minimum wage.
With a minimum wage of $9.19 an hour, Washington already has the highest rate of any state in the nation, well above the federal minimum of $7.25. Washington’s rate was established in 1998 when voters approved Initiative 688, which provides for annual increases based upon changes in the cost of living. In spite of that, Western Washington has become the hub for a burgeoning movement to increase wage levels across the country:
• In SeaTac, an initiative on the city ballot in November would raise the minimum for service workers to $15 an hour. The initiative has drawn attention and campaign contributions from across the country to the city of about 27,000.n In Seattle, socialist Kshama Sawant, who finished second in the May primary and will be on the November ballot for a city council position, is campaigning on a platform of a $15-an-hour minimum wage.
o Last week, fast-food workers in 60 cities across the country protested in favor of increased wages, again seizing on the indisputably arbitrary $15 level.
The goal, advocates insist, is to provide workers with a “living wage,” a phrase that has devolved into nothing more than a trite talking point. For the record, according to the Massachusetts Institute of Technology’s living-wage calculator, the living wage for a single adult in Clark County is $8.62 an hour.
Few economic matters can generate a diversity of opinion as rapidly or as vehemently as the minimum wage, and there is no shortage of studies to support the viewpoints on either side of the discussion.
On one hand, the argument goes that increased wages buoy the buying power of workers and, in the long run, increase revenue for businesses. Henry Ford famously paid his workers good wages, believing that the people who built his automobiles should be able to afford one. On the other hand, the opposite argument states that increased wages will simply mean fewer workers, that the debate really is between paying nine workers at $10 an hour, or six workers at $15 an hour.
Realistically, the notion of a minimum wage is a job-killing philosophy. If forced, through legislation rather than market forces, to increase pay for unskilled workers, business owners are going to reduce their number of unskilled workers. They won’t reduce pay for their valuable employees; they won’t reduce profits; they won’t cut other expenses. No, they’ll eliminate the positions that are the most expendable.
All of this certainly is frustrating for those Utopians who believe that increasing the minimum wage is some sort of panacea that will strengthen the middle class in this country. In an era when CEO pay often is outlandish — the head of Pfizer received $198 million in salary and retirement benefits after a five-year tenure in which the pharmaceutical company’s stock price plunged 40 percent — frustration understandably is growing among average workers.
But the truth is that the middle class is being hampered by a variety of socioeconomic factors other than the level of the minimum wage. It’s difficult to imagine a scenario in which that will be reversed, and it’s a situation that leaves workers with one clear option if they wish to increase their wages: They need to improve their skills.