If all goes as planned, next November voters will be asked to raise the minimum wage in Ohio from $8.55 per hour to $13. What will that do for us?
First of all, the minimum wage is not meant to be a living wage. It is a learning wage. When someone enters the workforce, he or she is not considered skilled at the job undertaken. There is a learning curve. After a few years, as the person becomes proficient at the assignment, they may be making $25 per hour, approximately three times the minimum wage.
Now let’s raise the minimum wage to $13 per hour.
The entry level skill of the new hire did not go up and the skilled employee did not lose any skills, therefore the skilled person should still receive three times the minimum wage. In this case, the skilled employee should receive $39 per hour. No business can raise wages by 50% without raising prices. Prices would go up as wages increased. It would be wages chasing prices chasing wages until it finally settled down. At that point you would find that it would then take $13 to buy what you used to be able to buy for $8.55.
The second argument that you will hear is that raising the minimum wage will bring people out of poverty. If that were true, there would be no poverty today. I remember when the minimum wage went from 75 cents to a dollar in 1956. That should have ended poverty. Did it?
The only thing that is accomplished in raising the minimum wage is to devalue the dollar. When I retired in 2000, I had money in savings and a 401k. Every dollar that I put away then is worth 66 cents today. Raising the minimum wage will devalue those dollars even more. Your dollars are losing buying power right along with mine.
Paul Janning, Wapakoneta