Fulfilling a campaign promise, Joe Biden wants to boost the federal minimum wage to $15 an hour.
Farmers, whose livelihoods and property are on the line, are right to be wary of the possibilities.
Proponents suggest that employers are able either to absorb increased labor costs, or increase prices to offset costs without negative impacts to employees.
It’s political claptrap.
Advocates say boosting the minimum wage will give millions of Americans a much-needed raise — or, at least, the ones lucky enough to keep their jobs. Politicians and proponents somehow miss the fact that hard-pressed employers will scour their operations for ways to reduce their payrolls to offset the increase. In addition to layoffs, many will switch to part-time and on-call employees as ways to save money.
Mechanization and automation, which eliminate jobs, will also become more attractive.
This wage hike would hurt small businesses the most. Big chains can absorb the increase, safe in the knowledge that their smaller competitors won’t be able to keep up. Those smaller ag operations and processors in labor-intensive sectors will be forced to sell out to larger competitors.
And it’s not only businesses that will feel the pinch. Local governments and school districts will also have to raise wages, or cut staff.
President Biden put his proposal to increase the minimum wage into his $2 billion COVID relief package. He most likely believes reluctant lawmakers — even many moderate Democrats have balked at the $15 figure — will have a tougher time saying “no” if it’s wrapped in the flag of pandemic aid.
But Congress needs to be cautious. The result will be fewer jobs, fewer businesses and a weaker rural economy. Putting the thousands of businesses battered by government reaction to the virus on a better footing makes more sense than increasing their costs.
Those seeking higher minimum wages want to use other people’s money to make political points with their supporters.
Proponents of higher minimum wages may be disappointed to find out that a robust economy, not governmental fiat, benefits workers most.