Minimum wage hike would hurt more than help

Increase would do lasting damage to New Hampshire’s workforce

As a small business owner, I am frequently surprised to hear the commentary of many politicians who talk about policy issues, when many of them seem to have little or no experience on how these policies will actually impact real people in their communities and instead speak in talking points and high level political jargon.

One particular example is the recent effort to raise the so-called minimum wage and Governor Sununu’s veto of this recent legislation. I say “so-called minimum wage” because the real minimum wage will always be the same, regardless of any legislative effort. The actual minimum wage is $0 – the wage of an employee who can’t find work. In reality, that minimum wage should actually be negative, since those who can’t find employment often cost other taxpayers, in terms of Medicaid, housing subsidies, cash welfare and other benefits.

Here in New Hampshire, one thing is blatantly obvious — our labor market is about as tight as it gets. I know this firsthand too, as the owner of a small construction company. For nearly two years, I’ve been perpetually looking for labor, often to no avail, and always at a rate higher than what the Democrats have proposed for the minimum wage increase.

With the current number of workers earning minimum wage being fewer than one-tenth of one percent of New Hampshire’s population, this bill was a solution in search of a problem that would do lasting damage to the workforce of this state. We are fortunate to be experiencing the strongest economy in New England, and one of the fastest growing in the country, but that will not last forever.

When the next economic downturn occurs, a plethora of labor will be available, competing for the decreasing amount of jobs. If the minimum wage is increased, the number of jobs available will be even fewer and exacerbate the problem. Unskilled and inexperienced workers will be the hardest hit and often will be priced out of the market entirely. They will be experiencing the true minimum wage — $0, and will likely have to turn to government assistance, straining the taxpayers, or their family members, who will also be feeling the pinch of tough economic times.

Young, unskilled workers, as well as those returning from incarceration or substance abuse treatment will take the biggest hit in the next downturn. Those that can’t create $12 per hour in value will be unable to find work and, worse yet, without work they will have no opportunity to gain the skills to advance their careers and lives. Those with
backgrounds that present risk to employers will get passed over by other workers.

Proponents of the minimum wage increases should think about the very same people who have been shut out of work in places like New York, Seattle and San Francisco after the minimum wage was hiked. They should also consider that 1.3 million people that the Congressional Budget Office estimated would lose their jobs with a federal minimum wage hike.

Moreover, these same supporters of minimum wage increases should focus on doing things that ensure that our economy continues to thrive. Instead of passing counterproductive minimum wage legislation, they should work to continue to do the things that helped deliver our strong economy – lowering the tax burden on employers, cutting regulations and reducing electricity and health care costs. This would ensure that New Hampshire workers would be paid much higher wages than even the would be wage mandated in the poorly conceived bill that got vetoed.

Thank you, Governor, for protecting the New Hampshire advantage and continuing to allow employees and employers to determine the wage value that is right for them.

Christopher Maidment is the owner of CJM Construction in Peterborough.

Categories: Opinion