GUEST OPINION II: More Reasons to Raise Minimum Wage

By on December 29, 2015

In Wyoming, increasing workers’ pay promises benefits to everyone.

151230GuestOpinion2_origTime and time again, people in Wyoming vote against their own best interests.

Many who live in poverty — if they vote at all — inexplicably select candidates who continually work to cut the social safety nets that exist to protect them. Some oilfield workers vote for candidates who adamantly refuse to pass safety measures that could extend their lives. Motorists who depend on well-maintained, safe roads for their survival often pick candidates who don’t want to spend any money for critical transportation upgrades.

You get the picture. But the one issue that constantly amazes me is why so many voters — from the working poor to the wealthy — keep electing officials who maintain that raising the minimum wage will kill jobs, raise prices and cripple the economy.

In reality, millions of workers across the country would take home more money to spend on both essential products and other items they can’t afford now. The federal minimum wage has been raised 22 times since it was set at 25 cents in 1938, and not one of those increases has resulted in fewer jobs or higher prices.

Company presidents who oppose any minimum wage hike may benefit from a substantial increase because it would give people more money to buy their products and services. In turn, it may be necessary to hire more workers to keep up with demand.

The most well-known example of this strategy is when Henry Ford more than doubled the daily wages of his workers in 1914, from $2.25 to $5. After he did it, his auto manufacturing company became the most successful in the industry.

The reason Ford dramatically increased wages has long been debated. Some argue that his main motivation was to reduce turnover on his assembly lines, thus cutting the huge expense of training new workers. That certainly was a factor.

But Ford supplied his own answer in his 1926 book, “Today and Tomorrow.” He wrote: “The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One’s own employees ought to be one’s own best customers.”

The bold move worked. Ford sold 398,000 Model Ts in 1914, 501,000 the next year, and topped 1 million cars annually by 1920.

Ford noted his company increased the buying power of its own workers, and they increased the buying power of others. “It is this thought of enlarging buying power by paying high wages and selling at low prices that is behind the prosperity of this country,” he wrote.

Five states do not have minimum wages on the books. In the rest of the nation, the state minimum wages are all set at or above the federal $7.25 per hour minimum — except Wyoming and Georgia, which both have only a $5.15 per hour minimum requirement.

Wyoming politicians and businesses maintain that raising the state minimum wage to $7.25 an hour isn’t necessary, because most employers pay at least the federal level. But not all of them do. A worker who is in any occupation not covered by the Fair Labor Standards Act is subject to the state minimum wage, not the federal. An employee at a business that makes less than $500,000 annually and does not engage in interstate commerce is not covered by the federal minimum wage.

There are other exceptions to the federal law. There are no minimums for agricultural workers, domestic service workers, workers on commission or employees of educational, charitable, religious or nonprofit organizations. The Equality State Policy Center reports that about one-third of Wyoming workers are not covered by the federal law. According to the Department of Labor Statistics, about 9,000 workers in Wyoming are paid at or less than the minimum wage.

Meanwhile, it’s outrageous that tipped employees such as restaurant workers are subject to a $2.13 state minimum wage. Some may make more in tips to regularly bring in more than $7.25 an hour, but many do not. The state’s “tipped offset” law requires employers to make up the difference between the state tipped minimum and the federal minimum wage, but in Wyoming, that’s a joke.

There is absolutely no enforcement of the requirement. I’ve talked to wait staff in local restaurants and national franchises, and the universal answer is they don’t request the tipped offset because they are afraid of losing their jobs.

The real issue Wyoming should be debating is an increase to a livable wage for all workers in the state. A full-time worker who now makes $7.25 an hour earns $15,080 a year. The federal poverty level for a family of two is $15,930. For a family of three, it’s $20,090.

The latter obviously cannot get by with one adult working for minimum wage and another adult staying at home with a child. The second adult would also have to work, at least part-time, and child-care costs could easily wipe out most of that second income.

That means the family must be dependent upon government welfare programs such as food stamps and housing subsidies to survive. But requiring all employers to pay livable wages would greatly reduce the government’s high cost of operating such programs. All taxpayers should welcome that change, but too many fail to see the connection between wages and the use of social services. They would apparently rather rant about “welfare queens.”

The Massachusetts Institute of Technology calculated livable wages in all 50 states. In Wyoming, MIT estimated the living wage for an individual in the state is $9.93 an hour. For single parents with one child, it increases to $20.80.

State Rep. James Byrd (D-Cheyenne) will make his third straight run at increasing the state minimum wage during the Legislature’s budget session beginning Feb. 8. His first two attempts were soundly defeated: in 2014, the House voted 51-9 against the proposal, and earlier this year it was shot down 8-1 by a legislative committee.

The bill’s chances in 2016 have not improved. Byrd wants to raise the state minimum wage to $9.50 an hour, and the tipped minimum from $2.13 to a more reasonable $5 an hour. But in the budget session, bills must receive a two-thirds vote in both chambers just to be introduced. The same legislators who killed the 2015 bill will be back next year.

But they don’t have to return in 2017, when a newly elected Legislature is sworn in. Candidates running for re-election should be asked at every door they knock on and at every campaign forum they attend to explain why they voted to keep stifling the Wyoming economy and keep workers below poverty by not raising the state minimum wage.

Candidates seeking a first term in office should be made by voters to state a clear position on raising the state minimum wage.

If Wyoming voters are better educated about the issue, they should stop buying state lawmakers’ whoppers about massive layoffs and higher prices and vote in the best interests of all Wyoming residents. We can follow the example of Henry Ford, who knew that a rising tide lifts all boats.

WyoFile is a nonprofit news organization focused on Wyoming people, places and policy.

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