Minimum wage increase hurts businesses, workers

Lohmer

Lohmer

ST. PAUL — One bill currently moving through the legislature would impose an increase in the minimum wage from $6.15 per hour to $9 per hour for small employers and to $10.55 per hour for large employers. The increase would come three stages with the new minimum wage level in place by August 2015. Every year after that, the minimum wage would be adjusted based on the annual increase in inflation.

Some argue that a minimum wage increase is necessary because the current minimum wage is not livable for our state’s workforce. However, according to the Minnesota Department of Labor and Industry, only 3.2 percent of all workers age 25 to 54 years old work minimum wage jobs. Well over half — 59.7 percent — of those making minimum wage are teenagers and young adults aged 15 to 24. A third of those making the minimum wage also receive overtime, tips, and wages.

As a mother, I always encouraged my boys to get jobs when they were in school to learn the value of hard work and reward of earning a dollar. Imposing an increase in the minimum wage would simply create fewer working opportunities for our kids who are trying to get their first job during high school and college.

If such a dramatic increase to the minimum wage is implemented, hard-working taxpayers who run family-owned businesses such as restaurants would have to cut back on workers or increase the cost of their goods and services. In fact, the Minnesota Restaurant Association announced that nearly all of its members plan to increase menu prices and reduce staff hours in response to an increase in the minimum wage.

I’m particularly concerned about the effect a minimum wage increase would have in our community. One of the attractions in our area is the St. Croix River. Many family-owned businesses — especially restaurants — locate there for the beautiful view of the river. Imposing a minimum wage hike would only encourage businesses to locate on the Wisconsin side of the St. Croix River and prompt some of them already here to relocate across the river.

Those who run and work for restaurants wouldn’t be the only ones negatively affected by an increase in the minimum wage. Recently, I toured a group home in our district that serves adults with disabilities. Their staff works 24 hours a day every day of the week. Those who run the group home told me that imposing an increase in the minimum wage would significantly hinder their ability to assist a vulnerable group of people with unique needs who need care around the clock.

Another great family-owned company in our district — Linder’s Greenhouse in Lake Elmo — told me that they generally hire 900 seasonal workers every year. Under this minimum wage proposal, the number of hires would be cut by one-third to about 600.
During a recent Jobs and Economic Development Committee meeting, I asked a representative of Conservation Corps Minnesota if the increase in the minimum wage would affect their ability to employ people. Their response to me was that it would absolutely affect the number of individuals they would be able to hire.

While raising the minimum wage may be a well-intentioned idea, it is a flawed proposal that will hurt employers and employees alike while making it more difficult for our state to move back to having a healthy economy.

Like you, I’ve been frustrated with the snow during this spring. I’ve been eager to enjoy sitting on a restaurant patio with family and friends overlooking the beautiful St. Croix River in Stillwater. While the winter weather may prevent the patio doors from opening, imposing an increase in the minimum wage will do nothing but permanently snow-blanket the doors of our businesses and cause a blizzard of unemployment for those who need jobs the most.

Rep. Kathy Lohmer represents state House District 39B. She can be reached at 651-296-4244; by e-mail at rep.kathy.lohmer@house.mn or by U.S. Mail at 239 State Office Building, St. Paul, MN, 55155.

  • Shawn Shaw

    If you do not pay your employees a living wage, someone else makes up the difference. Just another great example of our wonderful Socialist Aristocracy of America!!

  • CG

    Hmm… “Minimum wage increase hurts workers” Really?

    The minimum wage of the past provided people trying to work their way up in life significantly more buying power than it does today. Created in 1938, the value of the minimum wage rose relatively steadily until it reached a high point in 1968, when its nominal value was $1.60/hr. Thereafter, it has fallen relatively steadily as Congress has failed to adequately adjust it for inflation over time.

    If the Federal minimum wage had kept pace with inflation since 1968, it would be $10.70 today, not $7.25.

    Those who favor keeping the minimum wage at today’s depressed value (which simply is not a “livable wage”) are favoring employers, yes…but not workers. And, sadly, many employers have chosen to grow their businesses (and their personal wealth) without a sufficient concern for providing their employees a livable wage, regardless of what is Federally mandated.

    This is a moral issue as well as an economic one, don’t you think?

    We can’t do better than this?

    • David Hansen

      Why does someone have a right to a certain wage? If one man has a right to a certain wage, be it “living” or otherwise, then it must mean that another man loses his right to pay in the manner he feels is fit. How do you decide which man’s rights are real rights and which man’s rights are just fake? Do you think two people are incapable of deciding what they should exchange work and cash for without legislation? Rights of all men should be respected by the laws. Would it not be better to let a man earn the most he can by becoming more valuable to an employer and letting the free market dictate the supply and demand for the job?

  • Audrey Kramer

    Representative Loehmer:

    I encourage you to support a minimum wage increase. Here are the numbers: At $7.25 an hour, an individual earns a mere $13,920 dollars a year, certainly grossly inadequate for anyone living on their own. People often lose their jobs these days, and their only recourse after unemployment runs out is minimum wage salary. Could any of us raise a family, get educated, pay utilities and insurance on $13,920 a year? (Double that and it’s still inadequate.) College students end up with horrible debt in part because of the minimum wage problem.

    Increase the minium wage and increase everyone’s survival chances. It’s the Christian thing to do at this point in history when the homeless numbers are on the increase!

    Thank you, Kathy, as always,

    Audrey

    • David Hansen

      Audrey, what is Christian about Mr A and Mrs. B conspiring to force Ms. C to pay anybody more than Ms. C feels they are worth to her? Not by any stretch of the imagination, have Mr. A or Mrs. B, in their conspiracy to extol resources from Ms. C, committed any act of virtue. While it may be true they felt compassion, they shared none of their own resources in their conspiracy. Feeling compassion but not taking the action of sacrificing their own resources is not Christian. In fact, a Christian should feel guilt for forcing someone else to pay. I think the Christian thing to do is to not restrict somebody else’s free will, but rather to help the homeless directly without the intervention of the legislature.

  • Ken

    The minimum wage is not meant to be a livable wage. It is an entry level wage for young and inexperianced workers to gain work experiance for the job resume. Pull you head out of the sand. Who would want to make a minimum job a career for life? Doesn’t pass the smell or reason test.

    • Medusa

      Ken, by “livable,” we don’t mean having brand new cars or McMansions. We’re talking about people being able to have food on their tables and heat in the winter. Otherwise those living well below the poverty line are forced to use other social services, such as welfare and food shelves.

      When the working poor have to work multiple low-paying jobs to put food on the table, how much time does that allow a person to interview for higher paying jobs? It’s a vicious cycle of poverty that is nearly impossible to overcome. How do you suggest that happens?

      • David Hansen

        Medusa, if the employer of the “working poor” worker is forced to pay a”livable” wage, is the incentive for the worker to make himself more valuable to the employer by learning new skills greater or less?
        I think the incentive would be less. Why would they trouble them self to learn new skills if they can get more pay for simply doing what they have always done?
        Do you really want Rep. Lohmer to support legislation that reduces the incentive for unskilled workers to learn new skills? That wouldn’t be smart; I don’t think.

  • Lynn Peterson

    The minimum wage should be increased but by an amount that is sustainable, these entry level jobs are jobs that the first time workers and two wage earner families engage in. Also do all businesses have the ability to pay 30% more for their payroll and keep the number of workers they currently have? Probably not. Businesses funded by state-federal funding for example are not going to find easy funding for a large wage increase. I find the timing unreasonable due to the healthcare initiative adding hundred of thousands of dollars to businesses, along with higher taxes. So proceed with some caution because it could backfire and cause some businesses to just fail.

  • Dan Kantos

    What us insensitive business owners are saying is it is simple math. If we have x amount coming in and the government says we have to spend X% more and x isn’t increasing that additional cost has to be addressed, we all can’t run at a loss for the greater good comrads. Maybe the government should tell the consumer they have to spend more at the existing businesses whether they need the product or not. If you have to pay the unskilled employees in your business more, then you have to pay the skilled employees more. Increased costs don’t translate into increased sales. As the government and economy put more and more small businesses out of business, you won’t have to worry about minimum wage because there won’t be anyone to hire the unskilled worker.

  • David Hansen

    For those who disagree with Rep. Kathy Lohmer, I would ask: If you think raising the minimum wage is such a great idea then try and imagine what would happen to your job if it was mandated that your employer raise your pay to $200/ hour? How many minutes would it be before you were fired?

  • Robert Nepper

    Much better than any minimum wage is to create more jobs than we have workers to fill. Then wages will rise to get the help needed — but then employers have good business to pay higher wages.

    This can be accomplished by requiring employers to simply “Use or Return” all employee inventions which they claim (rather than claim and SCUTTLE the many unwanted ones as is done today).

    We submitted a NO-COST “Creative Freedom Act” (SF 21) to start this process this session but it was blocked in the first committee assigned to it by our DFL controlled legislature!

    Go figure RFN

    • David Hansen

      What a marvelous idea. The greatest resources known to man are his abilities to imagine and create. If there is any doubt about that, try to imagine what life was like before penicillin, the light bulb or computers. Eliminating barriers to the fullest utilization of man’s imagination and creativity sounds like common sense. Why would the DFL object?

  • Rosalie Klaustermeier

    I find it funny how people complain about the minimum wage going up and how bad it will be for the economy. But yet, when politicians and the president no longer have their job they continue to get a steady income. When a person looses their job they only get to get unemployment for only so long, so why should these politicians get a monthly or yearly income for the rest of their lives, let the dead beats go out and get another job like everyone else, maybe than the country wouldn’t be so far in debt and it would help. Let everyone start out at the same wage and see how they would like to live on “minimum wage”, if they could actually make it. Have fun people, to me it seems like the only ones complaining are the ones that make “good wages/money”.

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