At the Republican debate last Tuesday, minimum wage policy received major attention; not only from the candidates inside the theatre, but also from the hundreds of protesters backed by labor unions gathered outside the event calling for a hike in the federal minimum wage to $15 per hour. But the so-called Fight for $15, if successful, is poised to have dangerous unintended consequences for the very individuals the movement is claiming to want to help.
The short story is that the Republican presidential candidates are opposed to a minimum wage boost (Gov. John Kasich being an exception, albeit not up to $15), while the Democrats support a big hike.
The Democrat candidates are employing some pitched rhetoric on the issue out on the campaign trail. Bernie Sanders called the current federal minimum wage a “starvation wage.” Hillary Clinton hasn’t gone as far as Sanders, calling instead for a $12 federal minimum wage, while throwing the Fight for $15 crowd a bone with a positive tweet. President Obama, meanwhile, would be Mr. Conservative with this batch of candidates. He’s only seeking a raise to $10.10. (Someone named Martin O’Malley, who also claims to be seeking the Democratic nod, also supports the $15 rate.)
The Republicans, characterized as a bunch of Grinches by their opponents on the other side of the aisle, have raised their concerns over a higher minimum wage’s effect on job growth and on individuals trying to break into the labor force. Gov. Jeb Bush in a CBS interview, for example, said that a minimum wage increase would “kill job growth.”
There are also issues about the minimum wage that often go underreported.
Youth unemployment crisis for African-American community. Ben Carson cited his concerns over the minimum wage’s effect on young African-Americans seeking to enter the labor force. He’s right to be worried that rising wages shut people out of the workforce. The Bureau of Labor Statistics pegs the black youth unemployment rate at a staggering 25 percent.
Fewer jobs, more automation. Sen. Marco Rubio warned that raising the minimum wage will make hiring people “more expensive than a machine.” Some fast food restaurants are already heading in that direction. The CFO of Wendy’s during his company’s August quarterly earnings call said the chain was, in response to looming mandates to hike wages, exploring “technology initiatives, whether that’s customer self-order kiosks, whether that’s automating more in the back of the house in the restaurant.” As a guy who got his start as the assistant bun guy at Burger King, I’m happy I didn’t have to compete with a robot for my first job.
Despite the negative consequences, raising the minimum wage is all the rage. Two measures to raise the minimum wage to $15 are making their way to the 2016 ballot in California, while Gov. Andrew Cuomo of New York with the stroke of a pen this week raised the minimum wage for state workers to $15. Going to $15 for all workers will be center stage in New York’s next legislative session.
Closer to home, the Arizona Chamber will vigorously oppose any wrong-headed attempts at a state or local level to institute a minimum wage that harms businesses of all sizes and reduces employment opportunities for young people and individuals in entry level positions.
This debate is more about whether workers on the first rung of the career ladder deserve a raise; it’s about a path to upward mobility. Remember that securing a place in the middle class requires having a job. Unfortunately for those trying to land one, their supposed champions are making things harder for them.
Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce