Lots of nonprofits “advocate” for the poor, the underpaid and unemployed. They would surely voice their outrage if a lawmaker stood up and said, “It should be illegal to hire the poor!”
How odd, then, that many of the poor’s self-proclaimed advocates have in fact worked and advocated so hard to make it illegal to hire large numbers of those who most need jobs.
I refer, of course, to the demands that the legal minimum wage be raised and raised again. This is currently one of the Left’s favorite causes, in part because it is one of the few items on their agenda that enjoys wide support from Americans.
The last election saw powerful swings at the national, state, and local levels away from the Left -- for instance, center-right Republicans now control 68 out of 99 state legislative chambers -- and yet the same electorate also passed laws that will raise the minimum wage in several states and cities. Oakland, California, for example, which has no shortage of issues with poverty, chose to raise its minimum wage to $12.25 an hour.
I don’t question the average voter’s motive for supporting a higher minimum wage. No doubt most people -- 97% of whom don’t earn the minimum wage -- see such hikes as a kindly gesture toward the less fortunate. And some on the left, I’m sure, see these laws as an “obvious” way to help the needy.
Many union bosses and their various allies and front groups, on the other hand, have far less charitable motives, but let’s put that aside for a moment and consider what a minimum wage law actually is.
The Essence of Minimum Wage Laws
A minimum wage law is not a measure that says in effect, “Please be generous and try to pay your employees X dollars an hour.” No, it is a law that says, “All the police powers of the state will come down on your business or nonprofit if you dare to hire a single person for X-minus-one-penny per hour.”
Minimum-wage laws are not carrots that incentivize generous pay. They are clubs that punish the hiring of any persons who cannot provide their employers, during every working hour, with goods and services that are worth not only the minimum wage itself but also the cost of mandated employee benefits -- a total you can roughly estimate at 125% of X.
If the minimum wage were set high enough, you and I and everyone else could be banned from work. My first annual salary after leaving college in 1985 was $15,000. Assuming a 2,000-hour work year, that would be nowhere near the $10.10 hourly wage President Obama wants to impose on every employer.
Yes, if you make allowance for all the Fed-produced inflation since 1985, my younger self might have been able to obtain that 1985 job at the inflation-adjusted equivalent of today’s proposed minimum wage, but let’s add a few more factors into that equation. I had just been graduated from college, an advantage that a lot of people who struggle to find work lack. I had an entrée into my chosen field because of an internship I’d had in college. And I lived in a good-sized, prosperous city with above-average wages -- another big advantage I enjoyed over someone in, say, rural Alabama or Michigan. So if my 21-year-old self had not made it past high school, never had an unpaid internship, and lived in Paducah, Kentucky, I might never have grasped the first rung of the ladder.
That first rung went on to make possible all my subsequent jobs and earnings, and the importance which that not-high-paying job had in my life is typical. Study after study shows that your life path will be profoundly affected by whether you enter the world of work, at any wage, when you are relatively young. Miss that first rung in your teens and early twenties, and you are in danger of being mired in dependency.
That’s why it is so cruel and counterproductive to ban the hiring of young and/or relatively unskilled workers by making it illegal to pay anyone a wage equal to what this pool of workers can actually produce.
Nonprofits that Don't Advocate for Higher Minimums
If you don’t believe me, if you think I’m a shill for corporate bogeymen who sit on money bags stuffed with obscene profits, then listen to some “businesses” that are explicitly nonprofit and that exist largely to connect unskilled hands with that crucial first rung of the ladder. I learned of these stories from my friend Michael Saltsman of the Employment Policies Institute (EPI).
First, look at the Tastes of Life restaurant in rural Hillsdale, Michigan. It’s run -- or rather, was run -- by pastor Jack Mosley as part of his faith-based ministry to people who have “bottomed out.” Many have substance abuse problems, and the ministry helps them get sober, then find a job, often at the restaurant.
The eatery was thoroughly nonprofit, running losses that were covered by the ministry because the jobs it provided at low wages were so important to helping turn around suffering people’s lives. But after labor law changes made it illegal for the restaurant to continue to pay existing wages, Mr. Mosley had to close its doors last September.
Saltsman’s report on the restaurant found that eight out of twelve workers still don’t have a job as of last week; only one out of three former employees found new jobs.
Similar cruelties to those struggling to join the workforce are told by another outstanding nonprofit that has taken thousands of the hardest persons to employ -- multiple felons, homeless substance abusers -- and helped them join the world of work as independent citizens. For its efforts, the Doe Fund has received a Social Entrepreneurship award and much other recognition, including a study by Harvard sociologists that shows its effectiveness.
Watch this EPI ad featuring a Doe Fund leader and some of the people the Fund helps. See their view of the minimum wage. Then ask yourself: Should the persons in that ad have been legally banned from working their first job?
Next: Do union and nonprofit supporters of higher minimum wages always seek the best interests of the poor?