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Idaho has way too many minimum-wage jobs

buckner-webbWhen we talk about the minimum wage in Idaho, we are literally talking about the minimum: $7.25 per hour.  It’s the lowest hourly wage allowed under federal law.

That works out to a gross annual income of about $15,000 per year.  Basically, it’s enough to live off of if you’re single, have an apartment well outside a city center, don’t need a car, don’t mind eating Ramen noodles several times a week and don’t have any pressing need to go to the doctor or dentist.

The bad news is that Idaho has way too many minimum wage jobs.  As recently as 2013, Idaho led the nation in the percentage of its workforce earning the minimum wage.  According to a 2016 report by the Bureau of Labor Statistics, Idaho remains in the top five (percentage-wise) in workers earning the minimum wage or less, joining the likes of Mississippi, Louisiana, South Carolina and Kentucky.  Not exactly great company.  It’s high time Idaho broke away from the bottom.

workforce-column-sept-2017It’s important to note that studies have consistently shown that modest increases to the minimum wage have little to no effect on employment.  According to a 2013 report conducted by the Center for Economic and Policy Research (“CEPR”), a bump in the minimum wage increases demand for goods and services, which largely offsets the increased cost of paying a higher minimum wage.  Remember, minimum wage workers tend not to have a high savings rate.  They spend the money they get because they have to – for food, rent, gas and other necessities.  Furthermore, higher wages reduce costly turnover at companies (Henry Ford figured that out a long time ago) and increase employee loyalty.  A modest increase in the minimum wage can be a net positive for employers, increase spending on goods and services, and provide more security for workers.  It makes sound economic sense on all fronts.

The economic benefits of raising the minimum wage are significant.  The CEPR report (noted above) showed that a 10 percent increase in the minimum wage could result in about a 4 percent increase in food costs and an overall rise in prices of only 0.4 percent.  The result is, even adjusting for inflation, minimum wage workers end up having more buying power.  Using Idaho as a model, raising the minimum wage by 10 percent would take it up to just under $8.00/hour.  Such a modest increase is not likely to have a substantial effect on those workers’ savings rate.  In other words, that extra 10 percent will promptly get dumped right back into the local economy.  Ironically, the ultimate benefactors of a modest minimum wage increase are not necessarily minimum wage workers, but the businesses where they spend their extra dollars.

When you set all the inflammatory partisan rhetoric aside, it turns out that most businesses favor increasing the minimum wage.  Last year, a leaked video between a conservative polling firm and members of various Chambers of Commerce around the country revealed that 80 percent of business owners, presidents, and CEOs supported states raising their minimum wages.  Why?  Because they empathize with American workers.  That observation is prescient since the purpose of the minimum wage in the first place was to empower the people in our country who have the least amount of power.  The minimum wage was borne out of a collective sense of fairness to those who have the least and, arguably, work the hardest.  In Idaho, that group of people includes large swathes of the rural poor who have a strong work ethic, but lack the opportunities available to those who live in more populated areas of the state.

Nobody believes raising the minimum wage is the only way to boost Idaho’s prosperity to the exclusion of every other available tool.  One major reason Idaho has such a high proportion of minimum wage jobs is because the state is nearly dead last in education investment.  Reams of articles have been written about the thousands of high-paying jobs in Idaho that go unfilled every year because we lack an educated work force – whether it’s with four-year college graduates, community college graduates, certificate holders or apprentices.  Companies are not interested in bringing good-paying jobs to a state that ranks nearly last in education investment in the nation. Idaho Democrats in the Legislature continue to work hard to boost the ranks of Idaho’s educated workforce so all Idahoans have the tools to seek the American Dream.  Raising the minimum wage is just one of several ways to improve prosperity to the Gem State for all Idahoans.

If Idaho wants to rise from the bottom, we have to do more than the minimum.

Sen. Buckner-Webb represents District 19 in the Idaho State Senate.  She is serving her third term.  Buckner-Webb is a recipient of the Jefferson Award for public service; 2012 NAACP Heritage Hall of Fame award; American Mothers Inc., 2012 Idaho Mother of Distinction and 2013 Idaho Mother of the Year; Gandhi, King, Ikeda Award – A Legacy of Building Peace; and Hewlett Packard Award for Distinguished Leadership in Human Rights.

 

 

About Sen. Cherie Buckner-Webb

4 comments

  1. You lost all credibility when you said ” The minimum wage was borne out of a collective sense of fairness to those who have the least and, arguably, work the hardest.” This is just a ridiculous statement. It’s been my experience that minimum wage employees make the least because they work the least. The min. wage employees I do know, which are few, are lazy, with zero drive to succeed. Not that all of them are that way, just every one that I’ve ever known.

  2. snapon00@hotmail.com

    Its minimum wage or welfare. Can’t balance their checkbook but are PhD’s in courting the plethora of entitlement programs.

  3. “it turns out that most businesses favor increasing the minimum wage.” Heh? No business is bound by the minimum wage. It is simply an arbitrary floor set by people well distanced from the relationship of employer and employee. So, why would a business want more constraining mandates? Especially when there is nothing stopping them from going above it and paying their workers more? That paragraph defies logic.

    Additionally, the higher the minimum wage, the harder it is for a crafty business owner to pay $1 or $2 more per hour to attract better workers from other businesses who pay just the minimum.

    If you make minimum wage, make yourself INVALUABLE to your employer. If that employer doesn’t recognize your talent and see the need to pay you more, another will quickly. Whatever your life circumstances, to make more than the minimum you have to be more than the minimum.

  4. When kids graduate from High School and can’t balance a check book that is a problem. Employers need skilled well educated workers. Minimum wage was designed for entry level jobs not for life. If we can’t produce skilled workers from High School the minimum wage is all that will be paid. Because it is hard to find skilled labor many companies are turning to automation. Even McDonald’s is working on it as the push for higher wages forces them to replace people with automated ordering stations. Vocational training in our High Schools that teach students skills that are needed in the community is the answer. A basic HS diploma does not cut it anymore.