Opinion: Don't outlaw Michigan jobs
One of the most dangerous proposals likely to appear on this November's ballot would outlaw low-income jobs, which would, of course, cause those with low-income jobs to be laid off. This proposal is called raising the "minimum wage" – inaccurately, because the minimum wage is zero.
Minimum wage laws act by simply making voluntary work illegal – by criminalizing the job arrangements people have – and lost jobs are the inevitable result. This is basic economics: If you raise the state "minimum wage" from $9.25 to $12, everyone whose labor is worth less than $12 will be unemployed.
It becomes obvious when we simply ask: Why such a small increase? Why not $30 an hour? Why not $100? Because no employer could afford that, of course. But the same principle applies no differently in smaller increments; the larger the increase, the more jobs are lost.
The proposed increase will be devastating for restaurants, many of whom cannot afford to pay employees more than they do. Many of them will close, taking all of their employees to the true minimum wage, zero: they will be unemployed. (As an additional kicker to restaurants, they will be required to pay tipped employees $12 an hour. That's an enormous increase and will likely result in huge layoffs to servers.)
The restaurants that manage to stay in business will have to raise their prices to cover the difference. Ultimately, the public pays the cost of the increases, because forcing higher costs on the producer leads to higher prices for the consumer.
Still, those hit hardest by minimum wage increases are the workers themselves. Even those that don't lose their jobs are still punished, because now those who were earning more due to seniority and experience are back at the bottom, making no more than the dishwasher.
Who would push for a policy that would hurt the hard working people earning the least? Let's not imagine it's simply an error of judgment or a failure to understand basic economics.
Among the most ardent advocates for raising the minimum wage has been the AFL-CIO. The direct benefit to the union is that these laws cripple the low-wage competition of the marginal workers against higher-wage workers with union seniority. And furthermore, if it's illegal to hire marginal workers, a business might find it more economical to purchase a machine to perform the worker's job. Guess who builds and services the machine? See how this works?
This is why minimum wage demands always stop at the point where only marginal workers are affected and there is no danger of disemploying those with union seniority.
But make no mistake: raising the minimum wage creates no jobs; it only outlaws them. Supporters pitch this proposal as an act of kindness. It is not. It is an act of cruelty to tell thousands of people that their employment arrangement is now illegal.
Voters should turn out to protect those living in the margins, and protect their employers, the restaurants and retailers, to reject this insidious proposal.
Rep. John Reilly, R-Oakland Township, represents Michigan 46th District.