By GREG SARBER
Alaskans will vote on a ballot initiative this November proposing to raise the minimum wage to $13 an hour next year, which then would jump to $15 per hour by 2027.
When a similar law was passed in California it resulted in the loss of jobs for low-income workers.
It is also important to note that current wages for entry-level jobs in Alaska are already higher than what this legislation will achieve. We should ask ourselves why we are voting to enact a law that is not needed and who else might benefit from it.
California passed a similar new minimum wage law that went into effect on April 1 of this year. I covered that in a previous article, which you can read at this link.
However, as a brief update, since California’s new minimum wage has gone into effect, over 10,000 low-wage workers have been fired from their jobs because their employers could not afford to pay the new higher wage or found cheaper alternatives like automation to replace workers. Instead of helping employees, the new law put them out of work and into the unemployment line. I wonder what all of these now unemployed workers in California might say to the politicians who passed this legislation.
The second issue is the need for this law in the first place. On Sunday, I stopped by the Kenai Walmart. This business provides entry-level jobs, and their employees are the likely target of the new minimum wage initiative. Prominently displayed at the entrance to the store is a sign advertising that they were hiring and offering a starting wage of $16 per hour.
That wage is already higher than what is required in the ballot initiative, even when it goes into full effect in 2027.
It isn’t just Walmart. A relative of mine found a summer job in Homer and every business she talked to pays more than Walmart does.
There are entry-level jobs available today in Alaska that pay far more than what this proposed minimum wage initiative accomplishes. While I have only given a couple of examples from the Kenai Peninsula, it looks like job demand has created a need for employers to pay higher than the current minimum wage to attract employees. That is how the capitalist system is supposed to work.
How about the other side of that argument? What happens when job demand does not create higher wages, but they are forced on businesses anyway?
That example was in the news this week. It involves employees of a small business called The OCF Coffee House, a small chain of coffee shops in Philadelphia. The employees decided they wanted more money for doing the same job, so they unionized and demanded higher wages.
The business owner concluded that he couldn’t raise coffee prices and would be unprofitable to pay higher wages to employees, so they closed the three shops. Now all the workers are unemployed. The lesson from this incident is that the best way to get a higher wage is to look for a better job, not trying to force an employer to pay more for the same work.
If this ballot initiative is not needed in Alaska, we should ask Cui Bono: Latin for “who benefits?”
Let’s look at who sponsored this initiative. Two of its three sponsors are Democrats. Ed Flanagan was the commissioner of the Alaska Department of Labor in the Democrat Tony Knowles Administration. Genevieve Mina is the Democrat representative for Alaska House District 19 who is running for reelection this year.
Since Rep. Mina feels so strongly about the issue of minimum wages paid in Alaska, I have to wonder why she didn’t introduce it as a bill in the Legislature. Instead, Rep. Mina chose to sponsor it as an initiative. The initiative process in our state constitution is designed so that citizens can bypass the legislature to enact legislation from the grassroots. The sponsorship of this initiative by Mina and Flanagan makes it appear that this is not a grassroots movement, but was instead a partisan effort from leaders of the Democrat party.
We should ask if the Democrat party is the prime beneficiary of this initiative process. You can bet Democrats will campaign on this issue in the upcoming primary and general elections. They will pretend to be the friend of low-wage workers, despite this legislation being potentially harmful to them like it was in California, and despite it being unnecessary because wages have already grown higher than what this initiative accomplishes.
Call me a cynic but lying to low-wage workers with the promise of helping them economically, despite not actually doing so is a pretty despicable thing to do.
Greg Sarber is a board member of Alaska Gold Communications, the parent company to Must Read Alaska.
Realistically, nobody does. Often people lose jobs.
But it allows progressives to feel good about themselves.
I think losing jobs was the intent. Looks good on the surface, but underneath there’s an agenda.
Pandering is the new method of influencing a voting block while doing nothing for the constituency. These useless idiots that are making their way into the legislative bodies are collectively destroying our ability to live a free and productive life. Taxation by fiat.
Learned economists predicted what would happen in California if they passed it and the predictions came true. Unfortunately people often vote with their ignorant heart instead of listening to their analytical head. This will likely pass and then the hand wringing will commence.
I was about to say no one benefits from raising the minimum wage. Ever.
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But, in reality, the leftists/globalists/statists/Davos WEF crowd benefit. Raising the minimum wage supports their plans greatly. Make the poor more poor, and thus more dependent on the All-Powerful-State for their very survival. Make mail order more attractive, supporting the billionaires. Reduce household income, which can cost travel, car ownership, home ownership out of reach for more and more every year.
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Raising the minimum wage supports and benefits the “elites” (read that as parasites) who think they should be the only ones who deserve luxuries in life.
Most research also shows that when wages are forced up, prices also go up–which harms the poor more.
It’s such a horrible thing for any government to get involved in “wage and price controls”. The poor are not stupid but they are frequently uneducated and easily duped. The very thing that Democrats claim they are trying to do–have compassion on the poor–backfires badly.
Exactly.
Is there a single product that will not go up in price because of a minimum wage hike? A single service?
Leave it to the politicians to screw up something that has worked for years.
You can always find people who say they are underpayed. It is a free country to get a higher paying job.
How about we charge the doctors, politicians and lawyers triple the going rate.
If it was a free country two individuals could make an agreement on wages without coercion from the government.
Yes but they can go to a school or get into some labor union to better themselves.
Yes the feds have their fingers in private transactions.
Yes but can they BE FORCED TO ATTEND PUBLIC SCHOOL OR JOIN A UNION IN A FREE COUNTRY? U got a fed finger fetish?
It’s time. The cost of living is so elevated there, it’s hard for wage earners to survive.
Clueless.
Tell me Greg. Is there a single product, either goods or services, that will not increase in price because of a minimum wage hike? Name a single one.
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But, you think arbitrarily forcing companies to pay the least experienced workers more will somehow make it easier for wage earners to survive? Because it worked so well in California, right?
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The net result of this will be more people out of work, and dependent on the government for their very survival. I am not surprised you appear to be supporting this, actually. Not surprised at all.
I’m talking just about paying rent and the utility bills. I’m not talking about going to Walmart on a shopping spree. Poor people have to scale back on their spending anyway just to make ends meet.
Rents will absolutely go up as a result of a minimum wage hike. What do you think, the landlords will just absorb the additional cost of living? And, when the utility workers start demanding higher wages, do you really think utility rates will not rise as well?
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Then the government will start programs to help out the poorest among us, and pay for those programs by… wait for it… taxing stuff. Stuff like utilities and gas.
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Answer the question.
Is there a single product, either goods or services, that will not increase because of a minimum wage hike?
Minimum wage should be raised. I understand the false argument for not raising it but all the points made for not raising dont understand the problem. Rising wages do not cause prices to rise. Its the opposite. Inflation is an increase in the currency supply. The effect is rising prices and wages. Here are some numbers.
In the last 15 years the currency supply has gone from $1.68 trillion in January 2009 to just over $20 trillion today. Thats an 1,100% increase. For comparison, in the 15 years prior to January 2009 (1994-2008) the currency supply went from $580 billion to $1.68 trillion. Thats only a 190% increase in the currency supply. The increase in the currency supply is the cause of prices going up. More currency being created means the existing currency supply going down in value.
The fact is since 1971 the US dollar has lost 98.6% of its value. The federal minimum wage in 1971 was $1.60 an hour. The US was on a gold standard at the time. In gold terms minimum wage was close to $110 an hour today. This is why you could go to college on a minimum wage job working part time in 1971 and graduate with no debt. Houses, cars, gas, medical costs, everything was less. The wages were extremely high.
Even looking at the fake inflation COLA numbers the Social Security uses confirms this. Everyone agrees the COLA that Social Security uses isnt enough for retirees. You cant have this both ways. Either COLA isnt enough or it is enough. Here are the numbers. Social Security has the annual Cost Of Living Allowance. When on Social Security the COLA goes on your check. If you are not on Social Security the COLA is applied to your past wages. I will state my own COLA application to my personal wages. In 1991 my first job out of high school paid my $10.00 an hour as a radio station board and production operator. Social Security indexes my 1991 wage today to be 2.9248 times or $29.25 an hour today. In 1994 I changed jobs and went to work as a kitchen worker for $8.00 an hour with a raise to $9.00 an hour after 30 day. Social Security indexes that $9.00 an hour from 1994 to $27.17 today. The indexing number for 1994 is 2.6857 times applied to wages. Anyone can look this up. Now ill give the best example. In 2004 my gross annual income working as a kitchen worker (same job, same company as in 1994) was $47,023. Social Security indexes that using the COLA to 1.7896 times the wage back then which equals $84,152 today. Finally in 2019 I retired after 25 years at that company and my ending wage was $18.18 an hour. I started at $8.00 and ended at $18.18 an hour. Using the 2019 COLA indexing my 1994 wage was indexed to 2.12 times in 2019. So the $8.00 an hour indexed was $16.96 an hour and the $9.00 an hour was $19.08. So on average my ending wage indexed to inflation on average was exactly where I started 25 years earlier.
Bottom line is, wages are NOT rising for most. They are losing value. Ive always understood this basic concept and why I retired at age 47 with well over $1 million from an average earned income of $32,000 over 30 years.
Tell that to all the beneficiaries of the restaurant minimum wage hike in CA. I am sure they will agree totally, and realize how much better off they are.
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Theoretical analyses are all well and good, but the reality is, and history is abundantly clear on this front, have done NOTHING to help out the lowest wage earners, and have actually hurt them more often than not. And, you personal experience? Anecdotal evidence is meaningless outside of your individual life. So, please, sell your snake oil elsewhere.
Do that and you will put most of the people you want to protect out of work.
That is economic illiteracy.
Entry level minimum wage jobs were never intended to support or be a ‘living wage’. In the past these positions were filled by high school and college students or others either starting out in the workforce. Such jobs are not careers and it used to be most normal people had goals, aspirations and motivation to seek further training and education to better themselves and their earning power. The public education grooming system over the last decades, backed by leftist Marxist politics, have taught people they deserve to be supported without having to do much. They are told they are ‘owed’ and are encouraged to be underachievers with little self responsibility required. It is despicable and insulting.
They were promised if they were hard, They can earn an honest wage, For an honest day’s work, so apparently you don’t believe in that.
Says the guy who absorbed Alaskas bloated payments to educators in the 80s to make up for a lack of warm bodies in the schools. You have no self awareness and no shame. What age did you retire at? How many years have you been living off your pension? Have you been retired for more years than you worked? Why did you move to Florida where the living is considerably cheaper and not stay in the state that fluffed up your pension? Gutless.
That’s funny right there
I only taught for 2 years. Shop class.
Curious how your comment assumes that no matter how hard they work, they will never get a raise.
The very point of working hard is to demonstrate value to your employer, and earn increases in pay.
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One can be in 100% agreement with Elizabeth’s statement, and yours without conflict.
“Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force. Making it illegal to pay less than a given amount does not make a worker’s productivity worth that amount—and, if it is not, that worker is unlikely to be employed.”
― Thomas Sowell, Basic Economics: A Citizen’s Guide to the Economy
Just drive by the Walmart in Anchorage and view the encampments and vagrancy. When will they they deploy the Rubber Bullets and Tasers? How many more Millions of $$$ will be expended upon the Tax Payers before this endeavor is dealt wit
Git-R-Done!!!
Abolish all minimum wage.
Arguing about minimum wage in a fiat currency system misses the point entirely.
It doesn’t account for infinite money printing by the federal reserve, authorized by congress and signed by the president.
People are being paid with reserve notes that have no value. The money supply increases forever and dilutes the value of everyone’s money.
It doubly hurts when you realize the government has imported almost 30,000,000 foreigners to spread out the debt amongst more people since 2021 that’s legal and illegal aliens combined.
It exponentially hurts when you comprehend that over 150,000,000 people have been imported since the 1960s to spread out the inflation and mask it while the standard of living has declined precipitously.
By the way 150,000,000 imported people wasn’t enough to mask the debt. America needed to export almost all of it’s debts to the entire world through the petrodollar system. As a country, We’ve saturated the entire world with debt we promised to repay… with more fiat dollars.
The value of your house and land is measured in fiat dollars by the way.
The minimum wage is $0.00 & always will be, and the maximum wage is….well ask Bezos or Arnault and see what they say.
The LA Times has stated the 10,000 job losses is not true. Doesn’t keep the far right media and this author from running with it. June 12 publication date.
That’s correct. The rate is higher and climbing.
Maybe the L.A. Times could start pre-bunking MRAK.
The more the government does, the worse things get.
Who wins? Most likely unions and government workers!
It is my understanding that their wage structure is based on the minimum wage. If the minimum wage increases so do their wages automatically by a contract negotiated percentage. In the end this is another way to support unions, who then turn their member dues into campaign dollars for just these politicians…… or so one could speculate.
Lol or the union label!! Some places scale up the whole pay antes based on the minimum wage.. Instant raise for everybody!! No negotiating needed!!
There’s an old saying “you can’t see the forest for the trees” that applies to nearly all these comments and most public discussions regarding minimum wage.
Who benefits most? Large businesses (like Walmart, Fred Meyer, Safeway, etc.) who are multi-marketed and have the flexibility afforded by deep pockets. They can easily pay the new minimums and hire to their heart’s content.
Who suffers most? Small businesses who are in only one market and don’t have deep pockets.
So, then a few small businesses again have to leave the marketplace and the big boys are still there.
The raising of minimum wage doesn’t help the unskilled worker in the long run; it actually hurts their bottom line in the long run.
Who benefits? Illegal immigrants!
This is business reality.
Business exists to provide goods and services to consumers at a price and quality level said consumers will pay.
Businesses do not exist to create jobs. Jobs are a side effect.
More: business has a defined profit margin that must be met. If expenses exceed said margin, businesses will modify or close. Despite what the left will tell you, the vast, overwhelming majority of businesses have a very thin profit margin.
Force a business to pay more for staff than it can afford, the response will be to find ways to eliminate staff expenses. Reduced hours, cut benefits, cut staff, automate.
Raising prices is usually a last resort. Unless talking food/rent/utilities, consumers tend to stop using services they deem unaffordable or not worth the cost.
If these measures aren’t enough, said business will close.
Reading some of these responses, I’m stunned at the economic illiteracy of many people.
It is just an example of another spectrum of illiteracy.
You win best comment of the day! I’ve never had any accounting classes or other education regarding financial issues but I’ve listened and studied carefully. I, too, have been shocked at the lack of understanding among most people in our state and country.
I’ve found the most effective way to increase my wages was to make myself a better, more useful staff member.
Learn new skills, take on tough jobs, constantly do your best. Make yourself someone a company wants to invest it.
In my opinion minimum wage is designed to keep unskilled workers unskilled. While on the surface it appears benevolent and caring, the effect is to give unskilled individuals just enough to get by. Hence the “living wage” demand. It is an old communist trick.
It is telling every time the economy takes a dive, the powers that be talk about raising the minimum wage. Abolish the minimum wage and see entry level jobs for what they are, entry level not life-long employment.
I think a lot of the comments make sense when one looks at the big picture. Why do we need government to legislate new rules when employers are already advertising starting wages higher than the legislation? We need less government intervention.