Newspaper column: Minimum wage hike proposal would have opposite effect of its intention

Be careful what you ask for, because you just might get it — good and hard.

A group of altruistic, benevolent and well-meaning Nevadans calling themselves the Committee to Raise the Minimum Wage in Nevada has filed a petition with the Nevada Secretary of State’s office that — if it garners enough signatures to be placed on the 2016 ballot and then enough votes at the polls — would nearly double the minimum wage over the next decade.

The petition, filed this past week, would amend the Nevada Constitution to increase the minimum wage to $9.25 an hour upon passage and by 75 cents a year until it reaches $13 an hour, after which it would increase to match any federal minimum wage hike or equal to an increase in the cost of living. The current constitutional minimum wage is $7.25 an hour if health insurance is provided and $8.25 if not.

Fast-food workers rally for minimum wage in Las Vegas (R-J photo)

The petition also states that tips and gratuities shall not be credited as a way to offset the minimum wage and removes the $1 credit for providing health insurance. It also removes the exemption for those under 18 employed part-time by non-profits, but it does allow a lower wage if it is part of a “bona fide collective bargaining agreement” — the usual sop to the unions.

A measure to raise the minimum wage to $9 an hour never made it out of the 2015 Legislature.

The committee must gather 55,000 signatures from across the state to qualify for placement on the ballot.

One of the leaders of the petition drive, Neal Anderson, a Unitarian minister from Northern Nevada, told The Associated Press, “All labor has dignity and therefore we need to value that work. At some point we need to change policy as well, not just provide charity, which is never enough.”

The problem is that study after study has found that raising the minimum wage does not lift more people out of poverty, but rather its net effect is to actually increase the portion of families that are poor and near-poor, according to an analysis of those studies by the Heritage Foundation. This is because a few will see higher income, others will have their work hours reduced and some will drop from minimum wage to zero wage due to layoffs and businesses closing their doors.

The Congressional Budget Office has estimated that if the federal minimum wage were increased to $10.10 an hour — as proposed by President Obama and others — up to a million workers would lose their jobs.

According to the American Enterprise Institute, when the minimum wage rose 41 percent between 2007 and 2009, the jobless rate for 16- to 19-year-olds increased by 10 percentage points, from about 16 percent in 2007 to more than 26 percent in 2009 — even higher for minorities.

These are entry level jobs without which younger Americans cannot build the skills needed to earn higher pay.

Another Heritage study reported that every dollar increase in minimum wage really only raises take-home pay by 20 cents once welfare benefits are reduced and taxes are increased.

Then there are the affects on everyone. A Cato Institute analysis reports that a “comprehensive review of more than 20 minimum wage studies looking at price effects found that a 10 percent increase in the U.S. minimum wage raises food prices by up to 4 percent and overall prices by up to 0.4 percent.”

Victor Joecks, executive vice president of the Nevada Policy Research Institute, has warned that this proposal is not only anti-business, but anti-worker as well.

“Ultimately, it is the workers who get paid the least that will suffer the most from hikes in the minimum wage — with many of them losing their jobs as businesses close or turn to automation to replace entry-level jobs,” Joecks writes on the NPRI website. “The primary value of entry-level jobs is that they allow workers to gain basic employment skills, which in turn allows them to earn higher wages in the future. Raising the minimum wage, however, makes it harder for low skill workers to get those first jobs. Having that first job is crucial, because two-thirds of minimum wage workers earn a raise within a year.”

He points out that Nevada teenage unemployment already is 23.6 percent.

If this petition is successful it could put countless Nevadans on the dole for life.

A version of this column appears this week in the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel, the Lincoln County Record and the Sparks Tribune — and the Elko Daily Free Press.

11 comments on “Newspaper column: Minimum wage hike proposal would have opposite effect of its intention

  1. Rez says:

    I begin to wonder if the minimum wage is a false flag operation — after all, the real beneficiaries are foreign manufacturers. Which would make those well-meaning folks… either moles, or useful idiots.

  2. No concept of elasticity.

  3. Rincon says:

    Although a minimum wage is a poor way to deal with income inequality, better means are anathema to Conservatives, who are quite happy with the disintegration of the middle class – or blame the middle class themselves. While productivity has doubled since 1968, the minimum wage, in constant 1996 dollars, has declined from $7.21 to $4.82 in 2014. To just keep up with 1968, the minimum wage should be $10.93 an hour, but if we let the poor share in the bounty (unthinkable to a Conservative, of course) of our doubled productivity, since then, the minimum wage would be 21.96 an hour. Don’t worry though. The middle class would easily afford it, because the median income would be $103,000 a year – but of course, the rich have kept all of that bounty for themselves, and deserve it all according to Conservatives. No need to have a middle class anyway. They don’t really produce anything.

    The argument that a higher minimum wage will eliminate jobs sounds suspiciously like the argument the slaveholders maintained in the day, saying the slaves benefited from their involuntary servitude. Does it occur to you that whatever services the minimum wage holders are performing will, in most cases, still need to be done? Who would do the work if they were laid off?

    BTW, I just found out why the rich don’t pay any significant estate taxes. It’s called an intentionally defective trust. No kidding. Who could make this up? One can also create a family limited partnership and, if there’s still any tax liability left, then create an irrevocable life insurance trust. These vehicles are all codified in laws that enable the rich to escape taxes. But you begrudge paying a minimum wage groundskeeper the same money he would have earned in 1968. Hope you’re not Christians. You wouldn’t sleep at night if you were.

  4. nyp says:

    Since President Obama took office the economy has created 8.1 million jobs over the past thirty-six months, the fastest rate of growth since … the last time a Democrat held office.

  5. Steve says:

    Fed setting long-range goal of 0% real interest rates


  6. Patrick says:

    “Are there no prisons?

    “Plenty of prisons,” said the gentleman, laying down the pen again.

    “And the Union workhouses?” “Are they still in operation?”

    “They are. Still,” returned the gentleman, “I wish I could say they were not.”

    “The Treadmill and the Poor Law are in full vigour, then?”

    Some things just never change, except now it could be updated (for “compassionate conservatives”) to include not just a reference to the wretchedly poor, but also the poor working stiffs.

  7. Patrick says:

    Such great writing, such a great lesson, the tragedy that the lesson seems not to be learned by the world soon enough.

    “They were a boy and girl. Yellow, meagre, ragged, scowling, wolfish; but prostrate, too, in their humility. Where graceful youth should have filled their features out, and touched them with its freshest tints, a stale and shrivelled hand, like that of age, had pinched and twisted them, and pulled them into shreds. Where angels might have sat enthroned devils lurked, and glared out menacing. No change, no degradation, no perversion of humanity, in any grade, through all the mysteries of wonderful creation, has monsters half so horrible and dread.

    Scrooge started back, appalled. Having them shown to him in this way, he tried to say they were fine children, but the words choked themselves, rather than be parties to a lie of such enormous magnitude.

    “Spirit! are they yours?” Scrooge could say no more.

    “They are Man’s,” said the Spirit, looking down upon them. “And they cling to me, appealing from their fathers. This boy is Ignorance. This girl is Want. Beware them both, and all of their degree; but most of all beware this boy, for on his brow I see that written which is Doom, unless the writing be erased. Deny it!” cried the Spirit, stretching out its hand towards the city. “Slander those who tell it ye! Admit it for your factious purposes, and make it worse! And bide the end!”

    “Have they no refuge or resource?” cried Scrooge.

    “Are there no prisons?” said the Spirit, turning on him for the last time with his own words. “Are there no workhouses?”

    The bell struck twelve.

  8. […] attempt at jacking up the minimum wage — a petition filed in November — quietly fizzled a month ago. It would have […]

  9. Anonymous says:

    New study finds increasing minimum wage benefits mankind.

    “Economists are debating the effects of minimum wage increases after the University of California, Berkeley, published a study Thursday showing pay increases for restaurant workers did not harm job growth in six major U.S. cities.

    The report, compiled by researchers for Berkeley’s Center on Wage and Employment Dynamics, found no negative impact on hiring within the food services industry in cities that adopted minimum wages in excess of $10 an hour.”

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