So last week we learned about Steve Forbes daughters. What about my daughters? I will mention their experiences in a moment…
But first let me give some context. There is a move in the US to have federal, local and state governments increase the minimum wage significantly. The thinking is that increasing the minimum wage will decrease income disparity. Proponents view increases as a way to ensure low-wage workers earn incomes above the poverty line, and to narrow the disparity between rich and poor Americans. Opponents say raising the minimum wage discourages hiring and encourages employers to invest in automation or move jobs to lower-wage states or countries. (1)
Emily Bruno, founder of Silver Spring, Md.-based Denizens Brewing Co., said a minimum-wage increase would disproportionately hurt the local businesses that Montgomery County officials often tout, because small firms have less ability to absorb large cost increases than national chains do. An increase to $15 an hour would raise her labor costs by $300,000 a year, nearly equal to the brewery’s annual profit, she said. “My employees are like family, I want to pay them as much as I can,” Ms. Bruno said. “But I also need to make a profit to remain in business.” (1)
Now let’s get back to my daughters. We encouraged my oldest daughter to get a job as a teenager and she did at a local Subway restaurant. It was a just above minimum wage entry-level job. She was working there a few months when the owner/manager asked to meet with her. The owner handed her the key and ask her to start coming in and opening up the restaurant in the morning. My daughter was 17 years old and not even a senior in high school. Can you imagine the boost to a 17 year olds self-confidence that came along with this promotion? She eventually got a .50/hour wage increase. Amazing. Another of my daughters as a teenager left our house at 4:30 AM to be at work at 5:00 AM to open a coffee shop at another retail business. This job was a stepping stone for other job opportunities for her.
Andy Puzder recently wrote a Wall Street Journal article entitled. The Minimum Wage Should Be Called the Robot Employment Act…Mandating $15 an hour doesn’t help poor youth. It helps Flippy, the new burger-grilling machine…In the article he highlights how increasing the minimum wage is eliminating entry level jobs. “Taking automation to the next step, Miso Robotics and the owner of CaliBurger announced in March they have developed a robotic arm, called Flippy, that can turn burgers and place them on buns. CaliBurger plans to install them over the next two years in 50 restaurants world-wide. By encouraging automation, cities that significantly raise the minimum wage destroy opportunities for the least-skilled workers.” (2)
How else does a young person learn the reward of hard work as promised by the Bible? (Proverbs 10:4) One of my kids’ sports teams had a t-shirt for the players that said, “Hard work beats talent every time”. Simply and sadly stated, governments efforts to “fix” income disparity ends up increasing it.
I recently heard Biz Stone, the millennial co-founder of Twitter speaking at a banquet. One of the things he said was “Private enterprise is the answer for poverty. Government will not get the job done.” He also said, “It took me 10 years to become and overnight success”. As too often happens, government’s misguided best efforts to help people actually ends up hurting them. The free markets should function so young people can learn to work and advance.
(1) Has the Movement to Raise the Minimum Wage Reached Its Limit? by SCOTT CALVERT and ERIC MORATH April 6, 2017 WSJ
(2) The Minimum Wage Should Be Called the Robot Employment Act…Mandating $15 an hour doesn’t help poor youth. It helps Flippy, the new burger-grilling machine…by Andy Puzder April 3, 2017 WSJ