Tuesday, April 29, 2014

How NOT to Fight a Minimum Wage Hike

Marilou Halvorsen is the president of the New Jersey Restaurant Association. In a NJ Star-Ledger guest op-ed, she argues that Raising base wage for restaurant workers would kill jobs.

Her argument concerns the narrow issue of the so-called "tipping wage." As I understand it, the tipping wage is a legally mandated minimum wage for employees who receive tips, such as restaurant servers, which is set lower than the regular minimum wage. The theory is that tips will bring the worker's pay up to or above the regular minimum. For example, Halvorsen notes that the federal tipping wage is $2.13, which means that tips must come in at $5.12 per hour to bring the total up to the federal minimum of $7.25.

Halvorsen notes that, legally, NJ restaurants must make up the difference if tips fall short, so there is no "need" for raising the federal minimum. Besides, she notes, NJ "tipping-waged employees made an average of at least $15 an hour, including tips."

Besides not being needed, raising the minimum tipping wage would increase costs for businesses, resulting in fewer jobs:

Because of the added costs — more complicated bookkeeping and accounting processes — and the specter of higher payroll taxes due to changing how employees’ wages are calculated, it could discourage restaurants — especially the mom and pop places in nearly every community — from adding more employees.

This is the classic argument against the minimum wage—any minimum wage. She concludes:

    All we’re asking is: Let’s think before we slap more increases on this industry. New Jersey restaurants pride themselves on being fair and just.
    The facts are clear. Our restaurants are already providing employees with a minimum wage, and most employees make more than the minimum. The so-called advocacy groups simply have it wrong. Their solution would kill jobs, not save them.

While Halvorsen's concern is with the tipping wage, the broader issue is minimum wage laws as such. I left these comments:

The practical economic argument against raising the minimum wage may make sense, but it's not enough. When a business "advocate" states that "Every worker who receives tips deserves a [legally mandated] decent base minimum wage," she is raising the white flag. Once the NJRA concedes that the state has a right to dictate how much there businesses must pay their employees, it's all over but the quibbling over details. How do you fight those who blindly assert "restaurant workers deserve a raise?" For every business argument like "my bookkeeping costs will go up," the busybody "worker advocates" will claim that the employee faces this or that increased personal expense. And under our corrupt "brothers' keepers" ethics, forget justice; the "needs" of workers will always trump the concerns of America's favorite villain and scapegoat, "greedy" business. 

Economic logic has never been enough to head off government interference in business. Business owners must assert their moral right to operate their businesses as they judge best, just as job seekers, employees, and consumers act on their self-interest. Voluntary contractual associations, choices, and interactions between business, employee, and consumer—otherwise known as the free market—is the only legitimate (meaning moral) means of determining wage and price levels. Any method that involves force, legalized or otherwise, is gangland-style economics.

The minimum wage laws are immoral, and should be repealed. Government has no right forcing a mandated pay scale on business owners, or telling job seekers that they can't accept a job below a pay scale that politicians dictate. Employment terms negotiated and voluntarily agreed to by employer and employee is nobody else's business. If the restaurant owners don't take the moral high road—which is rightfully and logically theirs—and assert their moral rights to freedom of judgment and contract with their workers, they have no chance for their rights to be legally recognized, no matter how much "asking"—i.e., pleading—they do. 

Related Reading:

Minimum Wage Issue is Not "about what it’s like to live on $7.25 an hour"

NJ Voters Should Vote NO on the New Jersey Minimum Wage Increase Amendment

Some Fallacies Behind the Drive for the NJ Minimum Wage Increase Amendment

No comments: