It’s an election year, and some politicians – trying to shift away from the unpopular Obamacare health care law – are looking toward an issue that polls well: minimum wage.
Politicians and interest groups are looking to put an increase in the minimum wage to $10.10 per hour on the ballot in November. Though politically popular, government wage mandates harm real people. That’s the argument Research Associate Jarrett Skorup has been making in appearances across the state.
Skorup has appeared in three debates recently with representatives from the left-leaning Michigan League for Public Policy.
In a discussion at Grand Valley State University, the Grand Valley Lanthorn covered the event, quoting Skorup as follows:
“Among the most basic laws of economics is if you make something more expensive, you will have less of it,” Skorup said. “Minimum wage laws are making hiring someone more expensive, and thus you’ll get less of it.”
He also noted that government mandates particularly harm low-income, low-skilled workers who are trying to break into the workplace.
“Everyone starts out somewhere at a job, but politicians can make it more expensive to give someone that start,” Skorup said. “If the government says you have to pay someone say $15 an hour, which is a popular minimum called for nowadays, and the employer does not believe the person is worth that amount of money, then they will not hire them. If they have someone who they believe is worth less than that wage, they will fire them.”
Skorup also appeared on the PBS station in Grand Rapids for the show “West Michigan Week.”
In response to the assertion that a hike in the minimum wage would mean more money in the pockets of some workers, Skorup responded, “You can also decrease the money floating around from that standpoint when people lose their jobs, which is one of the consequences.”
He also noted research from a recent Capitol Confidential article showing that each of the politicians pushing for a higher minimum wage, including gubernatorial candidate Mark Schauer, either employ or formally employed unpaid interns. So the same people who want to increase mandates on businesses pay some of their own workers nothing.
The third debate was with former State Sen. Gilda Jacobs on “City Pulse Newsmakers” in Lansing.
During that discussion, Skorup noted that, according to federal government figures from the U.S. Census and Bureau of Labor Statistics, only 15 percent of employees earning $10.10 per hour or less live in poverty. He said that increasing the mandated wage leads to distorted incentives that would harm workers by pushing more of them into poverty.
Skorup also stated that wages are set by supply and demand in the marketplace, not by government mandate. He said if businesses simply paid what they wished, everyone would make minimum wage – when in reality, that makes up only a little more than 2 percent of the workforce.
“Right now, if you want to make a lot of money, you go and be and oil and gas engineer,” Skorup said, noting that the starting median salary is nearly $100,000. “Is that because the oil and gas companies are simply better people than these mom and pop shops or who own the fast food restaurants? Or is it because they are looking at the supply and demand in the marketplace and paying what someone is worth?”
In the end, the debate over government wage mandates is a simple one: Who determines the cost and benefits of something better: the government or the private market? The bulk of the research, and history, shows us that it is the free market.