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DOUBLING THE MINIMUM WAGE:
WHY NOT MAKE IT $100 PER HOUR?
Commentary By John Stossel


June 1-- The Campaign for a Living Wage is a big movement these days, and it must make the relatively affluent protesters on college campuses and communities across the country feel good knowing that by demanding it, they can create better lives for poor people.

Would you support raising the minimum wage to $12.25 per hour?

And now Santa Monica, Calif., has passed a living wage law. It was a battle fought by activists like Methodist Minister Sandie Richards of Santa Monicans Allied for Responsible Tourism (S.M.A.R.T.).

"We're making a decision that it's not OK to pay people such a low wage that they can't even survive," says Richards.

The activists' victory creates a law that says in a certain part of Santa Monica soon everyone must be paid at least double the federal minimum wage. That is, $12.25 an hour, or $10.50, if the employer also includes benefits.

This terrifies employers.

"I just can't believe how crazy our city council is, they don't get it," says Patty Phillips, owner of Patty's Pizza, "It's blackmail to the poor hotels and the businesses in that area."

Jeff King owns two restaurants in Santa Monica. "This living wage law will eliminate all profits," he argues.

He says that within six months of the law going into effect businesses are going to start laying people off or closing.

Isn't something off here? Don't they understand that wage and price controls make people's lives worse? Because wages are not just money, they're information.

Kind of like career signposts that guide workers to where they should work. If wages are $7 an hour one place and $8 an hour across the street, workers will move across the street.

Someone working for a low wage as a dishwasher may try to get a higher paying job as a prep-cook instead.

That's how Carlos Martinez moved up. He started as a dishwasher, being paid less than $4 an hour. Now he makes $27 an hour working as a chef. It's that type of freedom to negotiate wages that makes the system work. At Jeff King's restaurants, the entry-level job is dishwashing. "I started washing dishes in 1954," he says, "Everybody starts out washing dishes," he says.

It's how America has created jobs for untrained people from all over. It's been part of the American dream. Come to America, they'll train you, and if you work hard, you can do anything.

But having politicians set minimums destroys that opportunity because business won't be able to afford as many employees. "It'll dry up the entry-level job for just the people they're trying to help," says King. Raise the minimum wage and companies either won't hire or they'll fire people.
"We feel that it's totally legitimate to set standards of wages, standards of health, standards of development and that's what local government is all about," says Vivian Rothstein of S.M.A.R.T. Her colleague Madeline Janis-Aparicio points out that "policy makers always have to make those kinds of decisions."

But how do the activists or the policy makers know what the right wage is? If $10 or $12 is good, why not $20?

The folks from S.M.A.R.T. say they chose these wage levels because they wanted to be "reasonable." Richards says the businesses in Santa Monica are prosperous and will be able to absorb the wage increases "without skipping a beat."

Without skipping a beat?

The conceit of these people is stunning! Did they learn nothing from socialist failures in Cuba and North Korea? Do they still think that if they set prices, it will help people?

Give Me a Break.

Raising the minimum wage hurts the people it's supposed to help.