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Minimum employment with the minimum wage

November 4, 2014

With unemployment above 9 percent for more than 2½ years, the last thing Arizona needs is a mandated increase in the price of labor. Yet, that is what we’ll soon have when the state’s minimum wage rises by 30 cents an hour, a result of a 2006 ballot initiative.

Some argue that a higher minimum wage is good for the economy since it supposedly puts more money in the hands of consumers. However, that claim ignores a fact of life: Businesses may have to put off other hiring or expansion to pay the higher wage.

Proponents of the hike also fail to consider that a minimum wage not only forces businesses to pay a minimum, it also prohibits a potential worker from taking less than that minimum. Someone, especially a teenager, desperate for a job to help the family and a chance to get a work history started, might just be willing to take less than $7.65 an hour, but that will soon be illegal in Arizona.

In a time of high unemployment, the last thing we need is to make hiring people more expensive. As is all too often the case, a law passed in good times could now make bad times worse.

Dr. Byron Schlomach is the director of the Goldwater Institute’s Center for Economic Prosperity.

Learn More:

U.S. Bureau of Labor Statistics: Local Area Unemployment Statistics

Arizona Daily Sun: Minimum wage to rise 30 cents in Arizona

U.S. Congress, Joint Economic Committee 1996: The Case Against a Higher Minimum Wage



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