Why are jobs leaving Washington?? hmm...

[popefumanchu]

Washington's minimum wage is $7.16!! The highest in the U.S.

Just how is business supposed to thrive there?

 

[William Joyce]

D.C. or the state?

 

[Comrade]

D.C. or the state?

My guess is the state... I live in Seattle but I haven't made minimum wage since I worked for the YW in Portland, Ore. for $4.25/hour in my formative college years.

Hell, $7.16 an hour, is brutal regardless. Plus we've got a ~10% sales tax which cuts down even more on the fun stuff you might want to do in life.

 

[KarlMarx]

New York State may take the "honor" of having the highest minimum wage in the country away from Washington. The New York State Assembly and Senate passed a new minimum wage for New York State a few weeks ago. Governor Pataki vetoed it, but Assembly over-rode that veto....now it's up to the Senate and here we go.....

The effect will be to chase even more business out of New York and with those businesses, jobs. This will exacerbate an already grave job situation here in Upstate New York. Upstate New York actually had a decrease in jobs during the 1990s. Actually, Upstate New York and did not benefit much, if at all, from the economic boom of the 1990s.

Yes, the effects of having a minimum wage are actually the opposite of those intended. Instead of making things easier for low skilled workers, it makes finding a job more difficult. The reason is that businesses are less likely to hire new workers if the minimum wage is higher, instead they require that the workers that they do have work more overtime. In addition, businesses in states with high minimum wages may move elsewhere (i.e. other states or overseas) in order to cut costs. Alternatively, they may not move out of the state, but will not invest any further in that state (i.e. building or expansion), but will slowly move their facilities elsewhere. This is what happened here in New York State with IBM. Although IBM started here in New York, it has slowly moved out of the state over the past two or three decades. In fact, IBM hasn't built or expanded any new facilities in New York for nearly two decades.

Of course, politicians love to raise the minimum wage (during an election year no less) because that is how they score points with the voters. Of course, as I have pointed out, the only ones that benefit from a higher minimum wage are the politicians that voted for it.

 

[popefumanchu]

Even when I was a radical left-winger and ignorant of economices (redundant, I know), I saw the effects of raising the minimum wage. I worked at BK in high school and a value meal was three bucks. Ah, the memories. Then, the minimum wage went up and I thought "Woohoo, free raise!" Within three months or so, the price of fast food started going up by about the same amount accross the board. The minimum wage went up again a few years later and the same thing happened.

There are other factors, of course, but I can't believe people don't see the connection between raising the minimum wage and inflation. It also takes simple logic to see why companies leave the state or leave the country when the mimimum goes up. You can employ seven people here in NE for every five you can employ in WA, not including taxes. Living here is cheap, too.

What this kills is small business. Say your business employs three people and you absolutely need those three people to keep up your production. Some weeks they get a few hours of overtime. The minimum wage goes up ten cents. To give them a ten cent raise costs you an extra $120/ week plus any overtime. To a small business owner, that is like losing $120 to your paycheck each week. Now add in the increased social security and other payments and, suddenly, you can't afford to employ three people. You either eat the extra wages and slowly go broke until you make the extra money, never breaking even because more business means more overtime, or you lay someone off and you have to turn away customers, seriously damaging the health of your business. Then, inflation sets in and it makes it more expensive to run your business in other ways. It is a downward spiral. Put all of these small businesses and larger business losses together and you get a stagnant economy.

Bottom line, if you want economic and job growth, do not raise the minimum wage... get rid of it if you can.

 

[5stringJeff]

It's WA state he's talking about.

Minimum wage in the state is tied to inflation and rises yearly. It's very oppressive for businesses. I have spoken with restaraunt franchise owners whose rivals will not move into WA because of the oppresive business climate. It is a fact of life out here after 20 years of Democratic leadership. Hopefully, Dino Rossi can change that.