[Speed Gibson,
Monday January 22, 2007 at 11:35am]
Minimum Wage Hike
I've made this point before, but the near-certain increase in the federal minimum wage this year prompts me to make it again. But let's start with a question:
A hospital looking for a brain surgeon gets no acceptable applicants at even $10 an hour. They have to pay enough to make brain surgery worth the time and money that all that education and residency requires. They also have to pay enough for the surgeon to stay current and pay the increasing malpractice insurance.
Therefore, if you're paying no higher than the minimum wage, you are getting enough qualified applicants. What happens if you now raise that pay by $2 an hour? You get more qualified applicants. In fact, overall, the "new" applicants are if anything more qualified, drawing in other workers already making above the old minimum wage.
The unsaid, untrue assumption is that the people now making $5.15 an hour will be the same ones now making &7.25 an hour. The truth is, some jobs will go away, and some will be given to other, more productive workers. This will be much more pronounced with "living wage" mandate situations.
Q: Why doesn't every job pay only the minimum wage? That is, why would an employer voluntarily choose to pay more than the law requires?
A: To increase the pool of qualified applicants.
A hospital looking for a brain surgeon gets no acceptable applicants at even $10 an hour. They have to pay enough to make brain surgery worth the time and money that all that education and residency requires. They also have to pay enough for the surgeon to stay current and pay the increasing malpractice insurance.
Therefore, if you're paying no higher than the minimum wage, you are getting enough qualified applicants. What happens if you now raise that pay by $2 an hour? You get more qualified applicants. In fact, overall, the "new" applicants are if anything more qualified, drawing in other workers already making above the old minimum wage.
The unsaid, untrue assumption is that the people now making $5.15 an hour will be the same ones now making &7.25 an hour. The truth is, some jobs will go away, and some will be given to other, more productive workers. This will be much more pronounced with "living wage" mandate situations.