Dayton wages war on wages


By Christy Prust
Now hiring sign hangs near the side of the road, though the pay may not be perfect adolescents are getting desperate for jobs in the Stillwater area.

Nick Wicker

Minnesota Governor Mark Dayton has, in recent months, made it his goal to push for legislation increasing the state’s minimum wage to $9.50 per hour by 2015. There are currently two bills in consideration that regard the issue, both from the House and the Senate. The Senate bill suggests the minimum wage for hourly labor be raised to $7.75, while the House-led version promises $9.50. Dayton’s effort to raise minimum wage in Minnesota is a mistake, and if passed, these bills would only serve to increase unemployment, bolster inflation, and hurt small businesses.

The state of Minnesota hasn’t raised its minimum wage since 2005, and the current minimum wage is $6.15, which is lower than the federal level of $7.25. Minnesota is also the only state in the midwest with a minimum wage lower than that of the federal requirement.

Evidence shows that when minimum wage is increased, inflation and teen unemployment are sure to follow. This makes sound logical sense, as employers make no additional revenue, but are forced to pay greater overhead costs for employment. This leaves them with few options. They have to fire their less skilled, younger employees, or increase prices on products to account for the lost profit. Generally, the solution that is chosen is a combination of the two.

Proponents of minimum wage are often well-intentioned, but are woefully misled or downright blind to the long-term effects of the action. The big employers like Wal-Mart and Target make such large profits from their greedy exploits that they would certainly be able to dig a little deeper to give every cashier and greeter the pay-raise they deserve. The first central concept these types of thinkers overlook is that big corporations are not the employers of the majority of American labor. That burden falls on small business owners, ones with considerably tighter profit margins and little to no incentive to grow once another weight, such as minimum wage, has been dropped on their shoulders. The second idea they miss is that one cannot simply increase prosperity in a market by flooding it with more money. All paying low-skilled workers higher wages does is drive inflation and put these people out of jobs.

Resolutions of this kind are proposed, and often passed, repeatedly over a long enough period of time. The reason that this increase in minimum wage is necessary, or seemingly so, is due to inflation. However, the cure to inflation should never be to push measures that would only worsen the struggle of the unskilled workers most affected by cutting their hours, driving up prices of the goods they buy and sending them into unemployment.