He Said She Said February



Raising the minimum wage provides us with an important opportunity to offer hope to a very hard-hit group of residents here in our state. With a little more family income and spending power, more middle-class Michiganders would have the opportunity for some upward mobility; they’d be able to pay off debt, further their education, start families, retire — even engage a bit more in their communities (an activity nearly impossible for folks who have to work two and three jobs around the clock just to make ends meet). Few dispute the fact that those activities are immensely important to revitalizing our state.

Many opponents of raising the minimum wage warn that boosting worker’s pay will cut into businesses’ profit margins, threatening their ability to survive (let alone thrive) in an already fragile economy. Compensating workers with fair wages, with health benefits, and with retirement options doesn’t have to spell the end of a business, though — in fact, in some cases, it can actually work to an employer’s benefit. Take Costco, for example. There, workers make an average of just over $20 an hour (compared to just under $13 at competitor Wal-Mart). Sales at Costco have grown consistently as the economy has bounced back from recession; profits have risen and stock prices have more than doubled. Wal-Mart experienced a rise in sales, profit and stock prices during the same time period, but not as much as Costco. An MIT study suggests that when a company compensates its employees well, satisfied workers are more productive and more motivated, which translates into sales. It’s no coincidence that Costco’s workers didn’t step up to the picket lines during last fall’s country-wide strikes for higher wages.

Not everyone can adopt the Costco model, but the company’s success suggests that businesses don’t have to choose between growing their companies and employing a well-compensated, satisfied workforce — a workforce that, unlike the company’s shareholders, is more likely to turn around and spend those dollars right in our communities.

There are a variety of social and public policy questions we can afford to take our time considering before moving forward on, but raising the minimum wage (and thereby offering our middle class a crucial lifeline) simply isn’t one of them. Here’s hoping this fall’s elections ignite some meaningful, productive debate about our minimum wage levels that leads to some much-needed action on the issue.

Karissa and her husband have made Lansing their home since graduating from Michigan State University, where Karissa earned a bachelor’s degree in political theory and constitutional democracy from MSU’s James Madison College and a master’s degree in critical studies in literacy and pedagogy from the College of Arts and Letters. She currently works in the Michigan House of Representatives as the Legislative Director for State Representative Andy Schor (D-Lansing) and stays active in the community through a number of volunteer endeavors.


 

HeSaidSheSaid1Minimum Wage a Job Killer

By Saulius Anuzis

Minimum wage kills jobs! Plain and simple. Raising the minimal wage sounds good but is fundamentally flawed. It forces business to pay more for its worker than the value that is added to its product or service.

Some have advocated raising the minimum wage to $9.25 hour. But what if someone’s service isn’t worth that much? What if certain workers need additional training and skills that would increase their value, but we take away those jobs in Michigan by pricing them out of the market?

The challenge is when 47 percent of the adult population in Detroit is functionally illiterate and our educational system fails to prepare them for a job, let alone to be functional members of our society, we have a deeper and more profound problem.

No matter how nice or benevolent we may want to be with others people’s money, be it some corporation or governmental program, we can’t force you to buy a product or service you don’t want or can’t afford. The only way a market system works is if both the seller and the buyer perceive a fair exchange for any service or product.

The idea that government can arbitrarily set wages, prices and lifestyles to help the poor in effect hurts the very people it proposes to help. It prices their labor out of the market, denying them the training and experience they desperately need to move up the economic ladder.

Statistics show that only 2 percent of married working families earn a minimum wage. While many of them are second earners in the family, others have limited skills.

The best way to raise the minimal wage is by reforming our educational system and creating a friendly and profitable market for job providers.

Instead of chasing away entry level jobs, part-time jobs for second earners and jobs that provide new skills to improve one’s marketability, we should focus public policy on creating jobs!

Wages rise when you increase the capital applied to a job position. We can expand human capital by providing an excellent education and more job training. We can expand physical capital through advanced technology.

Those steps will increase wages. We need public policies that get to the heart of the matter and expand and incentivize capital formation. We do not need political feel-good proposals that are counter-productive.

The foundation upon which the American Dream is built is based on individual liberty and free market capitalism. We relish our freedom and have long advocated the principle of voluntary exchange. Government mandated minimum wages can never lead to sustainable wage increases. Higher levels of labor productivity can.

Saul Anuzis served as Chairman of the Michigan Republican Party from 2005-2009 and was a candidate for Chairman of the Republican National Committee in 2009 and 2011. His previous political and government service included working with Newt Gingrich at American Solutions, Jack Kemp’s 1988 Presidential campaign, serving as Chief of Staff to Senate Majority Leader Dick Posthumus, Chairman of the MI Senate Republican Campaign Committee and serving on the MI House Republican Campaign Committee.

 

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