Minimum Wage

A change in the minimum wage, as proposed by Mary Brent Wehrli in her letter (Feb. 21), is not the simple proposition it seems.

Entire wage structures in businesses are built upon entry-level wages, usually minimum wage. Seniority wages, shift differentials, lead-person wages, supervisory wages, and wages on up through the responsibility ladder in businesses are built on a structure that is influenced by the entry-level wage.

When the minimum wage is increased, it begins a new wage-setting cycle that inevitably results in a shift upward of all labor costs. While there aren’t too many absolutes in economics, one is that wage increases that are not accompanied by productivity increases are, de facto, inflationary.

We have seen so many cycles of inflation in this country, we have learned a little about their results. One certain one is that the poor are the most harmed, as they don’t hold assets such as homes, or investment property that can increase in value to help offset the impact of rising costs. Inflation is the reason that the minimum wage $6,968 annual income is inadequate to cover basic living expenses.

It may be politically expedient to favor ideas that “sound good” like the minimum wage increase, but only the economically naive (or the political opportunists) believe that it will benefit the poor.

JOHN V.R. KING

Rancho Village