by Jessica Dobrinsky and Adam Kissel
The tragedy of the minimum wage is that it stops people who want to work. The higher it goes, the more workers are told to stay home. This problem is especially severe for us in West Virginia.
The question of $12, $15 or gradual increases is not the real question. Do we want willing workers to have jobs or not? That’s the question.
Most importantly, a lot of people who want to work are not caregivers for a family. A better wage will help caregivers provide for their families — if they don’t lose their jobs. But consider retirees and students.
A retiree with a healthy retirement account does not necessarily need to work for money. She benefits from getting out of the house. She just wants to smile with grocery customers as she helps bag groceries.
At the state minimum wage of $8.75 per hour, maybe grocers can afford to hire her and give customers a friendlier experience. But at $15, the government would force her to stay home.
A high school student living at home is in a similar situation. He wants to get the experience that will translate into a full-time job after graduation. His neighbor’s small business with three employees is happy to hire him at the federal minimum of $7.75. But at $12, the neighbor can’t do it.
A new report by the National Bureau of Economic Research shows that minimum wage increases hurt people like these and those who need jobs the most. The economic evidence “points strongly toward negative effects of minimum wages on the employment of less-skilled workers.”
And even when people aren’t fired, the evidence shows companies adapt by cutting benefits, such as health insurance. If they can’t adapt, like many in the COVID-19 era, they go out of business, and everybody is fired.
West Virginia needs as many people in jobs as possible, creating value for one another in our state and fulfilling their potential. Certainly, in parts of the country, $15 does not go very far. We have a lower cost of living. We need the flexibility to keep people employed without forcing people not to work at a wage they would voluntarily accept.
President Biden’s Executive Order on Advancing Racial Equity and Support for Underserved Communities notes that rural communities’ equity should be a key factor as we advance. A one-size-fits-all mandate does not provide equity for rural communities in our state.
Sen. Manchin is correct to oppose a nationwide minimum wage increase. His key vote will probably save thousands of jobs in West Virginia.
Jessica Dobrinsky is a policy development associate, and Adam Kissel is a senior fellow, at the Cardinal Institute for West Virginia Policy.
