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The siren song of a higher minimum wage sounds good

The siren song of a higher minimum wage sounds good

Wayne Hoffman
June 17, 2013

I recently had an unemployed teenager in my car. He complained about how he was struggling to find work. And then we got into a discussion about the minimum wage. He pointed out that Washington state's minimum wage is $9.19 an hour, and yet Idaho's minimum wage is $7.25. How wrong it is, he said, that Idaho pays its minimum wage workers nearly $2 an hour less than those workers in Washington state.

So I asked him, "Suppose I were willing to offer you a full-time job paying $5 an hour. Would you take it?"

"Well, you can't do that," he correctly answered.

"I know, but let's say I could. I have a job for someone with your skills. It pays $5 an hour. That's more than you're making now, right?" I asked.


"And would you do that? Would you accept my offer?"


"But you make a good point," I said. "I can't pay you $5 an hour. That's illegal. And frankly, I don't have the money to pay you $7.25 an hour. So do you know what that means?"

"You can't give me a job?" he replied.

"That's right," I asked.

What's more, I added, if Idaho raises its minimum wage, it will make jobs like the one I might have given you, for employees with your skill sets, that much more difficult to fill.

And indeed, this is the legacy of the minimum wage. Politicians offer to pay entry-level wage earners more money, with promises that their economic meddling will yield helpful benefits. It never does, and furthermore, it makes economic opportunity for our most vulnerable people, especially teenagers and entry-level workers, even more out of reach.

Peter Crabb, a business professor at Northwest Nazarene University and a member of the Idaho Freedom Foundation's Board of Scholars, pointed out recently, "The national unemployment rate for workers age 20 and over is averaging 7 percent in 2013, down from 8.6 percent in 2009 when the federal minimum wage last went up. Meanwhile, 24 percent of workers ages 16 to 19 are unemployed today, the same average rate as in 2009, despite nearly 1.5 million new jobs since then."

In other words, current public policies are making it harder for young people to realize the American Dream.

Anne Nesse, a former candidate for the Legislature who is leading the charge to raise the minimum wage, told reporters a couple of weeks ago that she wants to raise the minimum wage in Idaho, and is working on a statewide voter initiative to make it happen. She called it a moral issue.

There is a moral issue involved, but the solution is different.

The waitress working a low-paying job at a restaurant could always leave that job and become a masseuse, a plumber, a driver's education instructor, an electrician, a lawyer. And so on. Ah, but if only the state government didn't make entry into those good-paying professions so much harder. She's trapped in her low-paying job because her alternatives are out of reach and unaffordable, thanks to government,

That waitress could always open her own restaurant. Ah, but if only the government didn't make it so hard to open a business, wherein one must navigate a labyrinth of agencies just to get started, including the tax commission, IRS, Department of Labor, planning and zoning board, city licensing office and district health office, at minimum. Alas, this option is out of reach, thanks to government.

Idahoans do have reason to be concerned about the fact that so many of their friends and neighbors earn the minimum wage of $7.25. Recent data show that a greater proportion of our state's residents earn a minimum wage than any other state in the country.

The reason for this—the thing that is keeping Idahoans from experiencing the full level of
economic opportunity—is not the state government's failure to adopt a higher minimum
wage, but the government's willingness to put in place more and more barriers to economic opportunity, even in Idaho.

Idaho Freedom Foundation
802 W. Bannock Street, Suite 405, Boise, Idaho 83702
p 208.258.2280 | e [email protected]
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