THE MOST important thing for any poor...
THE MOST important thing for any poor person trying to improve his or her condition is, of course, a job. It is the entry-level job that accords impoverished workers -- even those with no skills, no references and no employment record -- the invaluable opportunity to succeed and to prosper. It is literally the first rung up the ladder of success.
If that is true, then the most vicious governmental policy would be one that eliminates entry-level jobs, making it harder for the poor to get a foothold in life. Yet that is precisely what the state of California is preparing to do. Legislation is now moving through the Legislature that would in effect declare that anyone whose labor is worth less than $7.75 an hour will be denied entry-level employment.
The proposal is couched in the soothing and smarmy rhetoric of leftist populism. It is described as a modest proposal to raise the minimum wage by $1 over the next two years, increasing annual wages of minimum-wage earners to a paltry $16,000. “It will help the lowest-paid workers in California to improve their purchasing power and reduce their needs for public assistance,” according to one proponent.
But if that’s all it takes, why stop there?
If a simple legislative act increasing the minimum wage to $7.75 is all that is needed to improve the lot of the working poor by just a little, then why not raise it to $10 an hour and get them to the poverty level? For that matter, why not raise it to $50 an hour, assuring every working Californian a comfortable living? The truth is that if your labor is worth $6.75 an hour and the minimum wage is raised to $7.75, you simply become unemployable. The first rung of the ladder is gone, and there’s no place to start.
Proponents of this policy apparently believe that it is better not to have a job paying $7.75 an hour than to have one that pays $6.75. The French minimum wage is twice that of our federal minimum wage, and the result has not been greater prosperity. Quite the contrary, France’s unemployment rate is twice the American rate, and it hovers at an intractable 40% within those communities that recently rioted for days.
One newspaper gushed that the proposed state increase will boost the pay of California’s “working poor” by $2 billion. But the vast majority of minimum-wage earners are part of middle-class families. Most are teenagers chasing their first job or spouses of breadwinners trying to find a niche for themselves in the job market.
Ironically, as the minimum wage rises, these wage earners are much better able to survive the competition for remaining jobs than are inner-city teenagers, recent immigrants and welfare moms who need those jobs the most.
True, of the 5% of California families that depend on the minimum wage for more than half of their income, it’s not easy. But new employees don’t earn the minimum wage very long. As they build their job skills and prove their reliability, their pay grows proportionally. Of minimum-wage earners, 63% receive raises in their first year of employment. But by pricing unskilled labor out of entry-level jobs, those raises won’t be realized because those jobs either won’t be there or will be snapped up by more skilled workers.
The other big losers are the vast majority of the working poor who landed an entry-level job at the minimum wage a few years ago but who have now worked their way up to subsistence wages above the minimum. These workers will get no benefit from the minimum-wage hike -- but as prices rise in response to the employment constraints of the new law, their families’ standard of living will decline.
This legislation is the ultimate expression of the cruelest of all human lies: “I’m from the government, and I’m here to help.”