So why is an organization like Baltimore Rising whose primary objective is reducing unemployment and poverty in the City adamantly opposed to raising the minimum wage to $15?
The answer is simple. We’re good guys alright, but there’s nothing nice about us. Nice people do nice things for other people. And that’s, well, “nice.” We encourage those efforts and applaud them like crazy. But that’s not us. We’re all about business and urban economics.
Liberal, conservative, Democrat or Republican. None of that matters to us. All that counts is the science of economics and, most importantly, the practical aspects of business and markets that economics struggles to understand.
The Baltimore City Council is considering legislation that will, over the next couple of years, raise the minimum wage to $15. And that’s what?
Good to see that you’re paying attention. That’s right, nice, but counterproductive because it completely misses the point.
1. Raising the minimum wage to $15 per hour is the equivalent of setting a minimum salary for a full-time equivalent employee to $31,200 per year which is way too high for fast food and many, many small businesses and low-end jobs everywhere upon which substantial numbers of Baltimore’s residents depend for part-time and full-time income.
2. Raising the minimum wage to $15 per hour will discourage employers from moving here – unless the minimum wage is $15 everywhere. Not only will Baltimore City have the highest property tax rate in the state, it will have the highest cost of doing labor-intensive business that provides jobs for low- and unskilled workers.
If you were a employer, why would you move to Baltimore, let alone to the high unemployment neighborhoods of the city that are struggling? Forget about the Baltimore Development Corporation which has done virtually nothing for the two-thirds of the city we’re talking about. The logo for the City’s Department of Economic Development, if it had one, a department that is, might as well be a skull and crossbones. Seriously. What more can the city government do to discourage employers from coming to Baltimore?
3. Raising the minimum wage to $15 per hour will favor larger companies who are more readily able – more so than small businesses – to pass their rising costs for labor through to their customers.
4. Raising the minimum wage to $15 per hour will encourage employers to use less labor. Some people will make more, but others will make nothing, either because their positions are eliminated or because new low skilled and unskilled positions are not forthcoming. Raising the minimum wage is not going to reduce unemployment and may conceivably have just the opposite effect.
5. Most importantly, you can’t eliminate poverty just by raising the minimum wage above the poverty level. If it was it was that simple, the 22 previous increases in the Federal minimum wage would have eliminated poverty decades ago.
6. The way… The only way to make sure people make a higher living wage is to increase workforce skill levels, preferably by on-the-job training, City subsidized if necessary, and by doing whatever it takes to bring employers to the city whose productivity and profitability is such that they can afford to pay more.
“Will… Will there be a quiz at the end of this article?”
No, so you can stop fidgeting now, but we do ask that you think about what we’ve said, leave your comments and use the very same computer or other device you’re using to read this to take charge of your government.
Please call or email your City Councilman to oppose increasing the minimum wage.