The Times West Virginian

February 14, 2014

Raising wages by regulatory decree will lead businesses to trim young workers

Times West Virginian

— A bill that would raise the minimum wage 75 cents an hour by Jan. 1, 2015, passed the West Virginia House of Delegates Wednesday on an 89-5 vote.

The bill, which increases hourly wages from $7.25 an hour to $8 by Jan. 1, 2015, and to $8.75 the following year, will move to the Senate.

Supporters of the bill say that a state like West Virginia, which has one of the nation’s highest percentages of workers earning minimum wage, would benefit by giving these people more money to improve their lives. In turn, the theory goes, their additional spending would help invigorate the state’s economy.

Voting to increase the minimum wage in West Virginia will be a disaster for the very people lawmakers say they are trying to help.

Minimum wage is not, nor was it intended to be, a living wage. It is an arbitrary level of compensation set for jobs which require little or no experience, jobs which can be described as “entry-level.”

Many of the jobs at this level are the first jobs, the only jobs, young people can obtain. Yet these jobs are crucial to young workers, not for the money they make or don’t make, but for the experience they receive.

They learn responsibility; they learn how to work, and what it takes to keep a job. Hopefully, they use experience gained as a foundation to get a better, more challenging and better-paying position.

If they become worth $12 an hour to an employer, that’s what they will be paid.

By raising their wages by regulatory decree, lawmakers will force businesses to employ fewer of these workers in order to meet a higher payroll. And the last thing we need now is a tighter job market for younger workers.

General Opportunity, a national, nonpartisan nonprofit youth advocacy organization, released its latest numbers on Friday when it comes to the young and the jobless.

• The effective unemployment rate for 18-to-29-year-olds, when adjusted for labor force participation by including those who have given up looking for work, is 15.8 percent nationally.

• The declining labor force participation rate has created an additional 1.922 million young adults who are not even counted as unemployed by the federal government.

• The effective unemployment for 18-to-29-year-old African-Americans is 23.9 percent.

• The effective unemployment rate for 18-to-29-year-old Hispanics is 16.7 percent.

• The rate for women in this age group? It’s 13.5 percent.

Clearly, raising the minimum wage in West Virginia would make these numbers worse, not better.

Small businesses, the type that employ younger workers at minimum wage levels, are often unable to raise prices on their products or services, and thus can’t pass along higher wage costs to customers.

So what will they do? The only thing they can do: Cut their workforce to bring expenses in line with revenues.

In addition, the committee’s decision to raise the minimum wage could not come at a worse time. Businesses across the state are already cutting back hours for workers in order to avoid paying what, to them, are the unaffordable health insurance costs associated with implementation of the Affordable Care Act.

Of the delegates who voted for raising the minimum wage, we wonder how many in the past have voiced frustration with the Environmental Protection Agency’s war on coal, its attempt to make power generation using coal as uneconomical as possible.

Yet they have voted to impose the same type of top-down governmental regulation on West Virginia businesses.

We call that hypocrisy.

We’re not asking that our elected representatives be required to be Nobel Prize laureates in the field of economics.

What we do insist on is that they start to show some understanding of the real-world consequences of their actions.

— The (Beckley) Register-Herald

This editorial does not necessarily reflect the opinion of the Times West Virginian editorial board.