Nationwide Protest For Better Wages

The movement to raise the Federal minimum wage to $10.10 is sensible and consistent with other adjustments to inflation, e.g., cost-of-living adjustments in Social Security, etc. The adjustment would be important to those employed in minimum wage jobs, and the employement impact would likely be too small to measure. Moving the minimum wage to substantially higher levels, such as $15/hour, as some advocate, might have wider negative consequences. For example, when Washington DC moved to require WalMart and other large corporations to pay $15/hour, the chain cancelled plans for several new stores. One of those cancellations resulted in suspension of plans for construction of a new shopping mall. The legislation was vetoed by Washington's mayor, so we'll never know what the impact would have been. But would those residents of DC who live on low incomes have benefitted from less access to WalMart's low prices, and the construction and retail jobs of the new mall? The United States conducted a massive experiment with centrally-controlled, government-approved industry under FDR's National Industrial Recovery Act. Initially, there were parades in the streets celebrating this new age. Within one year there was widespread discontent, and numerous adjustments created a quagmire until the Supreme Court found the entire Act unconstitutional two years after its enactment. We long for a better deal for those who are trying to make a living, and perhaps support a family, by making a career out of entry-level jobs requiring a day or a week of training. These jobs may be great for a grandparent earning some extra cash to dote on their descendants, or students looking for pocket cash. But trying to turn them into careers with nearly middle class wages and full benefits seems likely to produce unintended consequences. What would help so much more is a surge of new skilled and semi-skilled jobs that provide a good living. Those come from new products and services--the fruits of innovation and investment. Re-structuring our public education system to assure a better-trained workforce is also vital to addressing the quest for more jobs with living wages. We should focus on those issues, rather than believing that we can solve a complex problem by fiat.