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Reeder: The costs of a minimum wage hike

Published: Wednesday, Jan. 22, 2014 11:57 p.m. CDT • Updated: Sunday, Jan. 26, 2014 11:10 a.m. CDT

(Continued from Page 1)

SPRINGFIELD – I remember the first newspaper job I had working at the Galesburg Register-Mail.

I was a student writing obituaries over the summer making $3.35 an hour. That was the federal minimum wage back then.

I don’t know how many times that news editor would yell at me and say the word “cemetery” does not have an “a” in it.

My story is hardly unique.

Just about everyone I know can look back on a low-paying gig doing something such as flipping burgers, bagging groceries or washing cars. Those jobs provided us with our first steps into the workforce.

They were where you learned skills such as showing up for work on time, following directions, treating customers politely – or spelling “cemetery” correctly.

The minimum wage never was intended to be a living wage – just a starting one.

There is a push now to increase the Illinois minimum wage to $10 an hour. It is $8.25 an hour. The federal minimum wage is $7.25.

Gov. Pat Quinn has taken to comparing opponents of the wage increase to Old Man Potter, the stingy banker in “It’s a Wonderful Life,” or Montgomery Burns, the greedy nuclear plant owner in “The Simpsons.”

Such comments make for good political theater, but they do little to advance public discourse on a challenging economic issue. Everyone in this political debate wants a more prosperous society – we just disagree on how that can be accomplished.

The problem with Quinn’s plan is the more you increase the cost of any particular commodity, the more you suppress demand. That’s true of candy bars, automobiles and anything you can think of – including labor.

Every time employers consider hiring, they ask themselves how that investment will enable them to earn money. If the cost of labor is too high, they will simply opt not to hire anyone.

It always has to pencil out.

Quinn wants to raise the minimum wage by 21 percent. This would leave low-skill workers vulnerable – very vulnerable. Instead of having a low-paying job, they could face the prospect of no job at all.

“I’ll be the first to admit that you can’t support a family on a minimum-wage job,” said Kim Clarke Maisch, who heads the Illinois chapter of the National Federation of Independent Business. “But the vast majority of people with minimum-wage jobs are high school students, college students and people who aren’t the primary earner in their families.”

Illinois already has a minimum wage higher than any of its neighbors, and it has an unemployment rate higher than them, too.

If a higher minimum wage would boost the economy – as Quinn and some of his would-be GOP opponents contend – we should now have the most prosperous job market in the Midwest, not the worst one.

Increasing the cost of labor will further exacerbate the problem.

Low-skill workers will be denied that first rung on the economic ladder that they need to climb out of poverty. And let’s face it: Working beats being unemployed any day of the week.

Not only does work provide income, it also enhances a person’s self-worth.

Raising the minimum wage will make some low-skill workers too costly to hire. And that’s denying opportunity to those who need it most.

• Scott Reeder is a veteran statehouse reporter and the journalist in residence at the Illinois Policy Institute. He can be reached at sreeder@illinoispolicy.org.

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