How wrong you are, Ms. Zundel.

The Salt Lake Tribune recently published an opinion piece by a student from the University of Utah supporting an increase in the minimum wage. I'm gathering this student hasn't stayed up during economics classes as the piece is riddled with incomplete information, misconceptions, and just plain bad math.

For starters is her assertion that the federal minimum is to ensure a full-time worker would always be at or just above the poverty line. On the contrary, the minimum wage is how much unskilled and unspecialized labor is worth. Minimum wage workers are replaceable cogs because they have no skill set that differentiates them from the rest of the labor market. Gordon B. Hinckley has said that the "world will in large measure pay you what it thinks you are worth." I hate to break it to you, but a job that can be done by 95% of the populace isn't worth a whole lot in the new information-based economy.

What baffles me is how college kids are earning minimum wage to start. Every major fast-food place I've seen is starting at $7 an hour or higher. This revises the full-time annual income she states by $3,848 to $14,560. The implication also seems to be that a college kid is going to stay at the same rate of pay for their entire college career, something that seems highly unlikely.

Even her own logic is full of holes. On one side, she claims that the minimum wage is meant to ensure individual survival, yet in the same breath "individual survival" now goes beyond housing and food to cover tuition, books, and entertainment. Since when was college an entitlement? Yes, it's about the only way left to get a decent job and earn a good living, but why shouldn't you have to work really hard for it? Where are the scholarships and grants you should have been applying for in high school? Why haven't you gotten any student loans?

There's a lot of options available, but she makes it seem like the grueling "work it to the bone" path is what you're doomed to. How about a reduced class load to reduce yearly tuition costs? Why not complete the required courses at the community college to save a few dollars? How about looking for off-campus housing deals and ditching your car for a bus pass? What her article underscores is not a need to increase the wages we are paying. It underscores a need to do well in high school to earn scholarships and grants, work part-time in high school to save up a little, and try and exercise a bit of frugality when shopping for your education.

I will concede a that the cost of higher education is pretty staggering. I opted to pick up certifications and real-world experience instead and it has served me well. I'll also concede that the minimum wage isn't adjusted for inflation and has decreased in value, but keep in mind that after the peak of minimum wage purchasing power in 1968, the country experienced a large recession. This isn't directly attributed to the high minimum wage (over $9.12 per hour in today's dollars), but to the free-wheeling spending policies that came along with it. States are a microcosm of this effect: states who have a higher-than-federal minimum wage have higher taxes, slower average wage growth, and a higher percentage of the state's GDP and budget spent on social services for the indigent. Yet, somehow, this is supposed to address poverty.

This is at the core of the minimum wage debate: bulldozing over facts and figures with emotional stories and junk math to make the opposition look bad.

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3 Responses

  1. Bill Fox says:

    a raise in the minimum wage is inflationary on its own. Employers will need to raise their prices and what does that do to those just above minimum wage, or the unionized worker who’s contract is tied to raises in the minimum wage, or anyone else’s pay for that matter. Then because everyone gets a raise to bring demand back to the same relative levels as before the increase, the price of housing, cars, and everything else go up to bring supply back into balance with demand. We then get some do gooder that decides the minimum wage needs to get raised again and we start all over again. I’ve got a better idea. Lets jail every employer who hires an illegal. By doing such there will be an increased demand for non skilled labor and the wages will rise without government intervention. BTW having worked 2 part time jobs, as the head of a family with 2 kids while carrying a full load in College, I know it’s not easy with low student wages, but doable

  2. Reach Upward says:

    Look, it wasn’t that much fun working full time, going to school full time, and raising a family to boot, but I managed to survive through undergrad and grad school, thanks to my wonderful wife and some very good family, friends, and neighbors. The effort has paid off well, not just economically, but in the way I think and and the way I approach life.

    You do a fine job of fisking the whole minimum wage argument. One candidate for my county’s commission lost my vote by advocating that the state raise the minimum wage. For one thing, what business does a county commissioner have in saying what the state should do with respect to the minimum wage? For another, I agree with you that it’s bad policy.

  3. That One Guy says:

    YAY BILL!!! you got it right!!

    Penalize the employers who take advantage of illegal labor, and who, by the same token, do a diservice to those hardworking individuals who are doing it the “right” way. This practice alone has done untold damage to our economy. Then step two is to teach our kids that you don’t have to own a car (or two), and live in a brand new home by the time you are 20. We have raised our children with an *astonishing* sense of entitlement.

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