Editorial: Minimum wage hike will increase prices and crime

Despite all the evidence that it will do more harm than good, a bill to raise the minimum wage in Nevada is still wending its way through the halls of the Legislature in Carson City.

Assembly Bill 456 would raise the minimum wage 75 cents per hour each year as it climbs from the current $7.25 per hour for those receiving company health insurance and $8.25 for those not insured until it reaches $11 or $12 per hour.

In his State of the State speech, Democratic Gov. Steve Sisolak called for raising the minimum wage and declared, “It’s impossible for an individual, let alone a family, to live on $7.25 an hour,” ignoring the fact almost no one “lives” on minimum wage. Fewer than 3 percent of workers are paid the minimum wage and most of them are under age 25 and working part-time. Most are supplementing family income rather than being self-supporting.

In fact, raising the minimum wage often results in jobs being cut and/or working hours reduced. One study found the average low-wage worker in Seattle lost $125 a month because the minimum wage was raised to $15 an hour.

Now, a recent study released by the National Bureau of Economic Research found that raising the minimum wage can harm even those who are not being paid the minimum wage.

Using national crime data from 1998 to 2016, the study found “robust evidence that minimum wage hikes increase property crime arrests among teenagers and young adults ages 16- to-24, a population for whom minimum wages are likely to bind.”

The study projects that raising the minimum wage to $12 an hour nationally would result in approximately 231,000 additional property crimes, costing the nation $1.3 billion. Raising the minimum wage to $15 an hour would generate over 410,000 additional property crimes and $2.4 billion per year in additional crime costs.

“We conclude that increasing the minimum wage will at best be ineffective at deterring crime and at worst will have unintended consequences that increase property crime among young adults,” the study authors concluded. They said that previous studies that projected a decrease in crime due to raising the minimum wage ignored the possibility of hours being cut and jobs being lost.

Don’t ignore the costs imposed on everyone when the minimum wage is hiked. A Cato Institute analysis in 2012 found 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.”

The Congressional Budget Office in 2014 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.

Without those entry level jobs younger Americans cannot build the skills needed to earn higher pay for a lifetime.

Still 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.

It’s the immutable law of unintended consequences. Lawmakers should abandon their support for this bill, which would cause more harm than good.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Editorial: Equal pay bill is a waste of time and money

If you ever seek to land a government contract in Nevada — paving roads, scrubbing floors, selling typing paper — under a proposed law you will be guilty until proven innocent.

Assembly Bill 106, being sponsored by Democratic Assemblywoman Ellen Spiegel of Henderson, would prohibit government agencies in the state from contracting with any firm until it has received a “certificate of pay equity compliance” issued by the state Labor Commissioner declaring the company provides equal pay for equal work performed by men and women employees.

Never mind the fact the federal Equal Pay Act of 1963 already proscribes pay discrimination based on gender.

The bill appears to be a sop to that widely touted canard that women doing the same work as men get paid less than 80 percent as much as their male co-workers.

The bill would create a mountain of paperwork because it requires submitting to the Labor Commissioner an annual workforce analysis that includes: the total number of persons employed in each job category by gender, the total number of hours worked for each employee and the total compensation for each.

Compliance will be costly and time consuming, driving up the cost of doing business, which will be passed along to taxpayers who cover the cost of government contracts.

AB106 would allow differences in pay for men and women if the employer can prove any pay differential is based legitimately on a seniority or merit system, is based on quality or quantity of production or some unspecified differential based on factors other than gender.

Of course, all these exemptions are entirely subjective and subject to the whim of the bureaucrat looking at the data. One person’s meritorious job performance is another’s discrimination.

Also, the bill states, “The denial or cancellation (of a certificate of compliance) is not subject to judicial review.” Satisfy the inspector or no government contract. Sounds like an invitation to pass envelopes of cash under the table.

Further, the bill also requires all governmental agencies and political subdivisions of government to obtain a certificate of compliance, thus again driving up the cost to all taxpayers for compliance

A study by the National Bureau of Economic Research in 2005 exploded the unequal gender pay myth. It concluded that “the gender gap is attributable to choices made by women concerning the amount of time and energy to devote to a career as reflected in years of work experience, utilization of part-time work, and workplace and job characteristics. There is no gender gap in wages among men and women with similar family roles. Comparing the wage gap between women and men ages 35-43 who have never married and never had a child, we find a small observed gap in favor of women, which becomes insignificant after accounting for differences in skills and job and workplace characteristics. What the average woman sacrifices in earnings from choosing jobs that allow for part-time work and flexible work conditions is presumably offset by a gain in the utility of time spent with children and family.”

We wonder if one way to comply with AB106 is to employ a workforce that consists of only men or women — instant compliance, no pay differential. Or is that discriminatory?

AB106 is an expensive and superfluous boondoggle and should be rejected by lawmakers or vetoed by the governor.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Rick McKee cartoon