I think there is a lot of confusion over the minimum wage and sick day laws. The ordinance passed by the county doesn’t help clear things up much. I’ve done a lot of thinking on this subject in the big picture and more recently and specifically on the county’s laws as it effects Brookfield in particular.
There’s argument against raising the minimum wage that goes back to the familiar supply-and-demand graph that shows a market at work. If you can picture in your mind the two curves crossing at some equilibrium point, that shows where the market clears.
This labor market has a specific number of jobs at a specific amount of pay where anyone is happy. The Econ 101 view is that if you introduce a wage floor like the minimum wage, then two things could happen.
Either the wage floor is below the equilibrium wage, so the introduction has no effect. Alternately, a wage floor above the equilibrium price means that there will be disemployment. At a higher rate, more people will want to work but there will be fewer jobs on offer.
There are a couple problems with this view. First of all, it is an oversimplification. There is no one unique “job market” that we can really talk about at a national level. There are a lot of different places with different needs and a lot of different workers with different levels of education and experience.
The second problem with this view is that it just ain’t true. Research by the economists David Card and Alan B. Krueger in 1993 looked at an increase in New Jersey and just across the border in Pennsylvania where there was no increase. The study showed that contra-econ 101, the employment in New Jersey rose.
Subsequent research shows that there is little to no negative effect on employment in raising the minimum wage. The ultimate problem is that like the labor market, these look at specific markets in place and time and may not be generalizable to all places in time.
Aside from economics, there is the real effect of the minimum wage on the people working. I worked in minimum wage employment for over 10 years – first as a part time job then later in life to support myself.
There are a lot of challenges to working a minimum wage job. Not only do you not get paid very much, you also have little say in the conditions of you work. The hours can be long but they can be uncertain.
I was making the minimum wage of $5.15 an hour and my rent was $400 a month. I needed to get a full-time schedule to just make my rent — half of my gross wages for the month. It was hard, and I didn’t have much bargaining power with my bosses.
A minimum wage increase would have immediately increased my living conditions and made my life easier – and there’s the opportunity now to do that multiplied across everyone who is working near the wage floor.
I have since moved from a place where I’m working minimum wage to a place where I’m helping to run a business. From this side, the view is more complicated. If you are a business where a lot of your workers are making close to the minimum wage, a raise in the minimum can be scary and force your hand on a lot of decisions.
Not only does an increase in the minimum mean by law you have to increase the people that were making below the minimum, it raises the wage floor. The front line supervisors are now at parity with their direct reports, and that’s not going to be good for morale so their wages have to go up and so on.
If you’re running a narrow-margin business, you now have to then look at what sort of efficiencies you have to make and the possibility of raising your prices. I understand the push-back from the chamber of commerce – they want their costs to be a low as possible. The only problem here is that looking at labor costs as pure costs blinds you to the fact labor isn’t just a cost, but people.
I’m of the opinion that minimum wage laws are important and ultimately they should be legislated at higher levels, but the opportunity now exists for the village board to show that they are concerned about all Brookfield citizens. Please, do the right thing.
J. Edgar Mihelic is a Brookfield resident.
