As part of the new debate over minimum wages, over two dozen lawmakers from the sunshine state plan to spend the next five days living on $17 a day to prove that the current $8.05 per hour is not enough for minimum wage workers to live on .
As the Sun Sentinel reports, $17 represents what a minimum wage worker has to live on after taxes, childcare, and housing are deducted from their paycheck. The group, which includes mostly Democratic lawmakers, want to make the point of how difficult it is to make it on minimum wage, thereby justifying the increase they seek.
This is totally theater and it’s winning some hearts as Fox 13 suggests:
I appreciate them stepping up and to me that shows that they are actually listening to us," said Demetra Atkins, a child care provider who took part in a news conference in Monday. "It's a challenge for them; it's a struggle for us. We live this day in and day out, month to month and if they are truly serious about this challenge, I am asking them to go more than a week."
Some minimum wage workers agree with Atkins and wonder whether this is all for show or whether it will have an impact.
"I would like to see them do what we do every day: get on a bus, ride three hours for work, stay there, make not even nine dollars an hour," said Allison Macho of Tampa. "Good luck trying to get them to raise it. I hope they do raise minimum wage, but they're not going to deal with it. They're not going to be able to survive on it."
While they want us to think it’s a gesture, all this amounts to is politicians show-boating for votes and to gain popularity.
What they won’t talk about is the rippling impact that raising the minimum wage to $15 would have across Florida and how it would backfire on low-income workers. The proposed increase would nearly double labor costs. Those increases would result in two things in the short and long-term: It would raise prices for customers (from the cost of happy meals to the cost of hotel rooms) and layoffs for low-wage workers.
This Forbes piece looks at the impact of the new $15 minimum wage in Seattle Washington. We are reminded that just because a law is passed, it doesn’t mean that human action will remain constant. Businesses will respond in ways that lead to unintended consequences:
But if history has taught us anything, it has taught us that, when government attempts to reach into the pockets of businesses or people, both will seek ways to preserve and protect their capital. This case is no different. For example, because the higher minimum wage only applies to employees working within Seattle’s city limits, if a company has workers in multiple locations, they may decide to reduce or eliminate their workforce in Seattle and relocate them to other offices. Some existing businesses may need or want to retain a presence in Seattle. In this case, companies may seek ways to replace workers with technology. I believe the kiosk will become very common in the restaurant industry as well as others. Some companies may decide to move just outside the city limits, especially if they are already located close to the boundary. This may be a bit of a stretch, but if enough businesses decided to exit the city limits, the value of commercial property could decline, the tax base could shrink, and Seattle could face difficult times ahead. This is a typical consequence of anti-business legislation. Although some will disagree, doubling the minimum wage may also be bad for workers, especially if it prompts businesses to reduce or relocate their workforce.
While no one wants to see American workers and families struggle to make ends meet, minimum wage hikes to high and arbitrary levels is the easiest but not necessarily the best way forward.
What are other ways to encourage higher pay? For one, when the supply of jobs expands, competition to gain and keep (good) talent forces wages and salaries higher. It’s cheaper for a coffee shop to give their good workers who provide the TLC that their customers love an extra dollar or other perks to keep them happy rather than trying to find replacements when those workers get woo’ d by their competition down the street. That principle can be elevated up to the c-suite level and down to the entry-level. When aggregated across a city or a state or the country we can see how all wages will rise making all workers better off. Businesses aren’t squeezed and neither are workers.