GRAND FORKS — Editorializing on a substantial raise to state or federal minimum wage rates is becoming an annual occurrence. But since it’s also becoming a constant topic in legislatures nationwide and now that President Joe Biden has taken office, here we go again.
In short: Don’t do it. It’s a bad idea, and one made worse by COVID-19. No doubt, some workers are hurting as they struggle through all sorts of financial crises wrought by the ongoing pandemic, yet it’s important to also consider what is happening to American businesses during an unprecedented time in history.
In recent weeks, Biden has pushed to more than double the federal minimum wage, which, at present, stands at $7.25 an hour. In proposals forwarded by Democrats, it would start with a bump to $9.50 an hour, followed by annual increases up to $15 by 2025.
It’s unfortunate the federal minimum has been stuck at $7.25 since 2009. North Dakota, too, has that rate, even as neighboring states Minnesota ($10), South Dakota ($9.45) and Montana ($8.75) all are higher. The North Dakota Legislature must work to fix this and should, every so often, adjust the state minimum wage upward in time spans that are reasonable both to workers and their employers. A $7.25 wage is just too little and without regular increases, it only adds to the national drive to mandate a higher wage.
But $15 is too much and too soon. And while Democrats hope to push it that high as a way to help workers during the pandemic, what could happen is exactly the opposite.
Consider all of the businesses that are barely hanging on as the pandemic has forced great change in the economic landscape of all communities. Consider the bars and restaurants that have seen revenue slashed and profits decay to the slimmest of margins. Consider the businesses that already have closed during the pandemic and, before that, during the retail apocalypse that has left so many empty shells where thriving businesses once existed.
Many — perhaps most — of the businesses that have been hit by the pandemic and the retail collapse rely heavily on minimum wage workers. Add to their expenses now and it could be disastrous. As a result, jobs will be lost.
A report by the Congressional Budget Office predicted that “in an average week in 2025, the $15 option would boost the wages of 17 million workers who would otherwise earn less than $15 per hour. Another 10 million workers otherwise earning slightly more than $15 per hour might see their wages rise as well. But 1.3 million other workers would become jobless. … There is a two-thirds chance that the change in employment would be between about zero and a decrease of 3.7 million workers.”
Add to that prediction the ongoing pandemic, which has exacerbated financial struggles for businesses like bars, restaurants, box stores and other retailers.
A doubling of the federal minimum wage should not happen. Rather, regular incremental increases — ones that are fair to both workers and businesses — are the best route forward, both nationally and in states, like North Dakota, that continue to keep the minimum wage brutally and unfairly low.
This other view is the opinion of the editorial board of our sister publication, the Grand Forks Herald.