Op Ed: Support the living wage law

According to a recent statement by Phineas Worthington (“Living wage law hurts workers, Oct. 21) the minimum wage law hurts the very people it was intended to help. He also puts an insulting label (“elitist mob”) on the folks who support the living wage law.

This idea seems to be circulating all over the pundit-sphere these days with little fact to back it up. If one takes stock of all the conflicting research on the topic they will find that employment is unlikely to suffer from a living wage. In fact, the Congressional Republicans have blocked a federal minimum wage increase three times over the past three years despite supporting one under George W. Bush.

When 38 economists were polled, they were split as to whether a raise in the minimum wage would cost jobs, and a quarter of them were unable to say one way or another what the effects would be. Economist David Cooper found that a higher minimum wage would support the creation of 85,000 new jobs.

So does it boost living standards for workers or does it kill jobs for those who need them most? There are many myths that have been generated over the years that this issue has been debated, one being that “mostly teenagers in short-term jobs make the minimum wage.” The reality is that nearly 90 percent of the workers who would be affected by a minimum wage hike are older than 20, and 28 percent are parents.

Another myth is that minimum wage jobs like fast food are just entry points to better-paid careers. The reality is that there are far fewer managerial positions to move into than in other industries, and few franchise ownership opportunities.

In 2009, Hristos Doucouliagos and T.D. Stanly published a paper that reviewed 64 studies on the topic, “Does raising the minimum wage kill jobs for those needing them most or does it boost the living standards for workers?” They discovered that when the findings were averaged out, the impact of raising the minimum wage on employment was close to zero.

The most statistically precise studies were the likeliest to find no impact at all. A 10 percent increase could result in a reduction of employment by a mere 0.1 percent. Another result found that a 10 percent wage increase raised prices by no more than 0.4 percent, according to the Congressional Budget Office.

Most important, employers are likely to find that a living wage reduces costly employee turnover among trained workers and puts more money in their pockets to the tune of some $30 billion (CBO) which, in turn, would be spent at many of these businesses. This is the best way to improve the employment environment with more freedom that Mr. Worthington spoke of.

A demand for product creates a demand for workers and boosts the economy. California still has the best economy in the country, better than most European countries, despite Worthington’s statement that is has the “worst business climate in the country.”

This year, the 13 states that raised minimum wages on Jan. 1 have experienced higher employment growth than the states that did not. Washington State has boasted the highest rate for 15 years and had a job growth of 0.3 percentage points above the national rate, according to the Bureau of Labor Statistics. The effect of state-level wage increases on teenagers, the canaries in the coal mine of low-skilled employment, was zero.

Worldwide, the minimum wage hikes had no effect. None of these hikes torpedoed the local economies, nor did they decimate job growth. If anything, they gave the economy and workers a boost.

One full-time minimum wage job used to keep a family of three above the poverty line; now it can’t keep a single parent above that line. Time for a living wage.

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Terry Province is a Sonoma resident.