Shugars’ Vote Correct on Minimum Wage

       Feb. 16 columnist Charlotte
Channing reported that Democrats plan to use state Sen. Dale Shugars’,
R-Portage, vote against an increase in the minimum wage to target him
in next year’s election campaign.

       She quotes Michigan Democratic
Chariman Mark Brewer saying, “Today, Dale Shugars cemented his reputation
as an extremist” by voting against the minimum wage increase.

       What is “extremist”
about not forcing workers with few skills into unemployment? When did
protecting employment opportunities for the poor become an “extremist”
position?

       There is no great mystery about
the effect of minimum wage laws — over the long term, their net effect
is to raise unemployment for precisely those workers who, due to a lack
of skills, most need jobs.

       People such as Brewer make
a faulty assumption about raising the minimum wage. They assume that if
a business employes 10 people before a minimum wage increase, it will
continue to employ 10 people after the minimum wage increase. In some
business this will occur, but in most the owner will find a way to eliminate
employees until his labor costs are as low as what they were before the
increase in the minimum wage.

       One way an owner can do this
is by replacing human beings with machines. A machine that might not have
been cost effective when an employee was paid $3.35 an hour merits a second
look when the employer is forced to arbitrarily raise wage rates to $4.75
an hour.

       Other business will respond
by eliminating or consolidating positions, and not expanding their hiring
as quickly as they would have before the rise in minimum wages. Downsizing
is already prevalent in many industries, minimum wage laws only accelerate
that tend.

       Even when businesses don’t
reduce their staffs, the raise in minimum wage hurts people with few skills
by making low skill jobs attractive to more highly skilled people. Kalamazoo,
for example, has many college students in its job market. As the minimum
wage rises to $4.75, they will tend to compete more for jobs which seemed
unattractive at $3.35. The result, which has been documented by several
studies of states which raised the minimum wage, is to benefit workers
from middle class families at the expense of workers in poor families.

       Yet those who propose raising
the minimum wage portray themselves as the ones who care and are compassionate
about the working poor, while those, such as Shugars, who oppose a measure
harmful to the poor are excoriated as “extremists.”

       If indeed Shugars is an “extremist”
for opposing a measure which hurts the working poor, then what this state
needs is more extremists in the state Senate.

       This article originally appeared
in the Kalamazoo Gazette.

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