In response to the recent letter to the editor from CC Hauer regarding a commentary claiming the $15 minimum wage in Seattle did not close income disparities, I’m not certain what the point is.
The study he discusses doesn’t really support his point, although like most academic papers it is a bit vague in its conclusion. I think that CC Hauer needs a refresher in business finance. The cost of any product or service is made up of cost of goods plus taxes plus profit plus overhead. Overhead includes such items as wages, electricity, rent and insurance.
The cost of goods includes such items as the provider’s (wholesaler or such) price plus shipping and handling. Taxes are obvious — sales tax, income tax, payroll tax, etc.
If you increase any of those costs then the retail price of the goods has to increase or the retailer loses profit.
If there’s no profit, then the retailer closes, ending the employment of all of their employees.
It’s a fact of life that minimum wage is for unskilled and unproductive employees. Unproductive is not necessarily a bad thing — an employee in training is basically unproductive.
If it costs more to hire a new entry level employee, the employer is going to hire fewer or none.
Raising the minimum wage hurts people on fixed incomes (retired, social security, welfare, etc) and entry level employees.
Further, those unskilled and unproductive employees suffer in that they may lose their jobs because the employer can no longer afford to have them on the payroll.
So the question becomes, who does the increased minimum wage help?
Mostly it’s union employees because most union contracts include an offset to the minimum wage. So, it suddenly costs more to haul freight, build houses and commercial structures, get your electrical outlets fixed, get your toilet unclogged, etc.
The “living wage” idea of minimum wage is a lie that makes politicians look good and hurts the rest of us.
Bruce Peterson
Centralia
