Traverse City Record-Eagle

September 14, 2013

Another View: Don't flip for proposed wage


Traverse City Record-Eagle

---- — The U.S. unemployment rate has remained at a stubborn 7.4 percent, Michigan at 8.8 percent, Detroit at 16.3 percent and youth unemployment at 16 percent. Yet that hasn’t stopped America’s labor movement from coming up with an idea that will only harm low-skilled workers: A $15-an-hour minimum wage for the fast-food industry.

There are few things more devastating to America’s working class than artificially-set minimum wages, whether the $9 federal proposal by President Barack Obama or the $15 minimum demanded by fast-food activists. A $15 minimum would be particularly harmful for bankrupt Detroit by discouraging fast-food restaurants and the essential entry-level jobs they bring for young, unskilled laborers.

“It would hurt most the very people they are trying to help,” says Paul Hubbard, a long-time Detroit businessman who has owned a Burger King and Captain D’s in the city.

Chanting “this is what democracy looks like,” Michigan activists have been picketing local fast-food restaurants like McDonald’s and Church’s. Their cause has been joined by UAW President Bob King, Michigan’s AFL-CIO President Karla Swift and union vote-seeking politicians like Detroit mayoral candidate Mike Duggan. ...

“Minimum wage jobs are entry-level jobs,” says Hubbard ... “People need to get skills on the job before they can work themselves up to $15 an hour.” ...

While workers under 25 represent just one-fifth of hourly employees, they make up more than 50 percent of minimum wage earners — 23 percent of them teens. Minimum wage hikes discriminate against entry-level workers by raising costs and biasing the labor force toward workers with job experience.

Congress’ last minimum wage hike in 2007 illustrates the hazards. The 40 percent increase, from $5.15 to $7.25 an hour by 2009, brought a plunge in working youth. Teen unemployment today is at a record with only 25 percent of 16-19-year-olds employed. In 2012, the black teen unemployment rate hit 42 percent as youth jobs disappeared. ...

The auto industry has shown how competitive manufacturing wages - the entry-level wage at GM’s Orion assembly plant is about $14 an hour — can bring jobs back to the U.S. from overseas. A boost in the minimum wage — whether $15 for fast-food workers or $9 for all jobs — would diminish employment opportunities....

Union leaders have rushed to embrace minimum wage hikes, in part because they increase the floor from which they can negotiate higher rates in collective bargaining talks such as the coming 2015 auto negotiations. But unrealistic wages will only drive auto jobs overseas again. ...

The Detroit News