Another View -- Dan Innis: Let the market work to raise wagesBy DAN INNIS
February 24. 2017 12:27AM
REMEMBER YOUR first job in high school? Maybe it was scooping ice cream in the summer or waiting tables at the local restaurant. You probably made the minimum wage, and at the time, it probably seemed like you had it all because you could fill your gas tank and go out with friends. Incremental raises meant your hard work paid off and you gained invaluable experience that had no small part in helping you move up in your career.
That is exactly what minimum wage earning jobs are supposed to propel workers to do. They are by no means designed to be lasting careers, but rather the foundational building blocks that encourage men and women to work hard, seek higher incomes and skills-based work.
Artificially raising the minimum wage by government mandate does not have the effect many would like you to believe. It hurts businesses, cuts critical entry-level jobs and affects low-income workers most dramatically through reduced hours and fewer opportunities to grow. It also hurts small businesses that may not be able to afford to pay increased wages and could cause them to close their doors as a result.
New Hampshire, specifically, does a good job of ensuring that wages reflect the market conditions. Right now, with the lowest unemployment rate in the nation at 2.6 percent, business owners are — all on their own — choosing to raise wages in order to hire and retain quality, skilled employees.
We must listen to the market and right now, skilled workers are in high demand and many small business owners are raising their starting wages organically.
As a hotel owner and operator, I know firsthand the effects the market has on a business owner’s ability to provide competitive compensation for employees.
It’s pretty simple: the more jobs available in the market, the more businesses must pay in order to attract and retain employees. I know from experience that at $7.25 an hour, I have trouble making a good hire — or even finding workers interested in the position. That’s why I start housekeepers at $10.50 an hour and they usually work their way up to $13 or $14 an hour (plus tips) within a year. It benefits my business to pay more to my employees because they stay with the company and they become experts in their work. I don’t need a state minimum wage mandate to figure that out. Nor do any other business owners that I know.
Across the board, we’ve even seen large retailers such as Wal-Mart, TJ Maxx, Starbucks, Gap, Costco, Ben & Jerry’s, and Whole Foods raise starting wages without government interference because it makes sense for their business and it helps them keep good employees.
It is reasonable to believe that employers compensate workers to the best of their businesses’ ability. It would be inappropriate, however, to artificially inflate wages by mandating a $12 or $15 minimum wage when it is already happening at many companies. Raising the minimum wage doesn’t transfer costs from wealthy businesses to the workers. It simply transfers costs to customers.
We also risk losing jobs to technology when the minimum wage is increased by the government.
We are seeing the cost of human capital increase while the cost of technology plummets. This puts real jobs for families at risk, as well as teenagers or entry-level workers who need the skills and experience offered by many minimum wage jobs to strengthen their futures.
While the idea of raising New Hampshire’s minimum wage feels good, it is not practical or even necessary as many businesses, large and small, see the benefit of paying their employees higher wages on their own.
We must continue to focus on ways to restore the New Hampshire Advantage, creating good jobs and restoring a competitive business environment in New Hampshire while letting the market do what it does best.
Sen. Dan Innis, R-New Castle, is chairman of the Senate Commerce Committee.