the Poor in One Easy Step
More hurtful help from government…
important thing for any poor person trying to improve his or
her condition is, of course, a job. It is the entry-level job
that accords impoverished workers – even those with no
skills, no references and no employment record -- the invaluable
opportunity to succeed and to prosper. It is literally the
first rung up the ladder of success.
If that is
true, then the most vicious conceivable governmental policy
would be one that eliminates entry-level jobs, making it harder
and harder for the poor to get a foothold in life.
is precisely what the state of California is preparing to do.
Legislation is now moving that would in effect declare that
anyone whose labor is worth less than $7.75 per hour will automatically
be denied entry-level employment.
is couched in the soothing and smarmy rhetoric of leftist populism.
It is described as a modest proposal to raise the minimum wage
by a dollar over the next two years, increasing annual wages
of minimum wage-earners to a paltry $16,000. “It will
help the lowest-paid workers in California to improve their
purchasing power and reduce their needs for public assistance,” according
to one proponent.
McClintock is an expert on matters of the State
budget and fiscal discipline. He is a Senator
in the California State Legislature and ran
for Governor in the 2003 recall election. His
valuable website is found at www.tommclintock.com [McClintock index]
all it takes, why stop there? If a simple legislative act
increasing the minimum wage to $7.75 is all
that is needed to improve the lot of the working poor by just
a little, then why not raise it to $10 per hour, and get them
to the poverty level? For that matter, why not raise it to
$50 per hour, assuring every working Californian a comfortable
The cold truth is
that if your labor is worth $6.75 per hour and the minimum
wage is raised to $7.75, you simply become
unemployable. The first rung of the ladder is gone and there’s
no place to start. Proponents of this policy apparently believe
that it is better NOT to have a job paying $7.75 per hour than
to HAVE one that pays $6.75.
The French minimum
wage is twice that of the United States and the result has
not been greater prosperity. Quite the contrary,
France’s unemployment rate is twice the American rate,
and it hovers at an intractable 40 percent within those communities
that recently rioted for days.
One newspaper gushed
that the proposed increase will boost the pay of California’s “working poor” by
$2 billion. But the vast majority of minimum-wage earners aren’t
working poor at all -- the median household income of a minimum
wage earner is $40,000. Most are teenagers chasing their first
job or spouses of bread-winners trying to make a niche for
themselves in the job market.
Ironically, as the minimum wage rises, these wage earners
are much better able to survive the competition for remaining
jobs than are inner-city teenagers, recent immigrants and welfare
moms who need those jobs the most.
True, of the five
percent of California families who depend on the minimum
wage for more than half of their income, it’s
not easy. But new employees don’t earn the minimum wage
very long. As they build their job skills and prove their reliability,
their pay grows proportionally. Sixty three percent of minimum
wage earners receive raises in their first year of employment.
But by pricing unskilled labor out of entry level jobs, those
raises won’t be realized because those jobs either won’t
be there or will be snapped up by more skilled workers.
The other big losers
are the vast majority of the working poor who landed an entry
level job at the minimum wage a few
years ago, but who have now worked their way up to subsistence
wages above the minimum. These workers will get no benefit
from the minimum wage hike, but as prices rise in response
to the employment constraints of the new law, their families’ standard
of living will decline.
It is the ultimate
expression of the cruelest of all human lies: “I’m from the government and I’m
here to help.” CRO
piece first appeared in the LA Times