The Tompkins County Legislature voted 13-1 on Tuesday to support New York’s plan to increase the statewide minimum wage to $15 by 2021.
According to the Ithaca Voice, two of the legislature’s three Republicans, David McKenna and Glenn Morey, voted to support the minimum wage boost. The lone dissenter was Republican Michael Sigler.
Sigler was concerned about the “unintended consequences” of the minimum wage hike, according to the Ithaca Voice, pointing to pressures on small businesses to cut staff and minimum wage earnings being unable to afford child care.
According to the Ithaca Voice, Legislator Carol Chock said, “While some may say that raising the minimum wage is complicated, what is really complicated is living on $8.75 an hour.”
Armed with rhetorical quips, it is obvious 12 out of Tompkins County Legislature’s 13 members are not packing any brains when it comes to economics and business acumen.
Raising the minimum wage by government fiat distorts the natural labor market. At an artificially high price, labor becomes too expensive and therefore businesses must consume less of it (i.e. fire people). Furthermore, raising the minimum wage incentivizes businesses to invest in technology that can replace the low-level work of minimum-wage earners, causing a further reduction in employment, and incentivizes low-skilled workers to maintain working in low-skill, low-pay jobs rather than bettering their prospects via education and learning new skills or trades.
Increased wages can, as many of it supporters argue, increase productivity, worker retention, etc, but these arguments miss the crucial point: the problem is not the increased wages themselves, it is the way in which they come about. In this case, the minimum wage is increasing by the whimsy of government legislators rather than by free markets. Free markets will increase real wages when the conditions are right, when, for example, employers believe by not increasing their workers’ wages they will take their productive work to a competitor who will pay more.
Government mandated minimum wages are massive intrusions into the economy that are antithetical to conservative ideas regarding the proper role and size of government. As such, requests for comment have been delivered to the two Republican legislators who voted to support in the increase in New York.
Lastly, one must wonder why Tompkins County Legislature is being so stingy. Why support a minimum wage of just $15 per hour? Why not simply increase it to $25 or $50? Wages so high would certainly benefit New York workers tremendously more than a $15 minimum wage?
In response, supporters of government-mandated minimum wage hikes often say those figures are “too high” or something similar. To use the words of Legislator Chock, it must be less complicated living on a $25 wage than a $15 one.
This common retort to minimum wage hike supporters—asking them why not go higher—actually exposes an important about the whole debate. When the relative frame of reference is from, say, $8.75 to $15, such an increase seems modest. Surely, big and greedy corporations have enough profit margin to cover a measly few dollars per employee.
In reality, that is a 70% increase. Not very many businesses can stomach such a huge increase in what is usually a company’s biggest expense category, labor. The bottomless profit margin is just a figment of liberal imagination; in reality, most businesses with large numbers of low-skilled labor (e.g. restaurants, grocery stores, etc.) have very slim profit margins. Apple, the most profitable company in the world, probably employs no minimum-wage workers.
Thus, any way you look at it, government-mandated minimum wage hikes have no positive outcomes. They have adverse economic incentives and negative impacts on local businesses and low-skilled workers.
One would have hoped that at least all three Republicans on the county legislature would have had enough common sense to vote no.
