by Mitch Kokai
Senior Political Analyst, John Locke Foundation
George Leef explores in a new Forbes column Seattle’s recent decision to mandate a $15 per hour minimum wage.
Seattle recently raised the minimum hourly wage that employers in the city must pay to $15. That puts Seattle out in front in America’s Living Wage Derby – hooray!
Mayor Ed Murray boasts that the high minimum wage makes his city “the model for the nation.”
Not only that, but the big increase, over Washington state’s minimum wage of $9.32 per hour will, he says, enable the city to “regain economic strength.”
Great objectives, Mr. Mayor, but I don’t know why you’re being so stingy. You have at best taken a baby step towards fairness for workers and economic vitality. Please consider my Modest Proposal.
First of all, $15 looks like a hefty increase, but you could go higher. Because, as President Obama repeatedly reminds us, economists have proven that raising the minimum wage does not have bad effects on employment. One study even showed that increasing the minimum leads to more jobs, not less!
Therefore, I recommend that you raise the minimum to $30 per hour. That will put much more money into the pockets of workers who struggle to get by.
Since lots of workers are (for some reason) now working only 29 hours per week, paying them $15 per hour gives them a measly $435 per week. Living on that amount is pretty hard, especially in a city where prices are high. Doubling it to $870 per week would be much more socially just.
As you consider that idea, please do not listen to any of those naysayers who might ask how businesses will be able to afford that increase in labor costs. First, companies have been making very high profits for the last few years, so they will have no trouble coming up with the cash. Second, the more employers pay their workers, the more of their products the workers can buy. Henry Ford’s big wage increase for his workers proved that.