Minimum Wage Hike Could Backfire, Advocacy Group, Think Tank Say

If Washington voters pass a citizens initiative to raise the state minimum wage, thousands of fellow workers will get a little something extra in their pay envelopes this winter, a national research group reports.

However, that something, the Employment Policies Institute warns, may be a pink slip.

Instead of lifting minimum-wage workers out of poverty, a pay hike will actually force employers to fire 7,431 low-skill workers, the Washington, D.C.-based think tank claims.

Citing data developed by the institute, the Washington state arm of the National Federation of Independent Business is spearheading a campaign against the labor-backed initiative on the Nov. 3 ballot.

I-688 would raise the state minimum wage of $4.90 an hour to $5.70 next year and to $6.50 in 2000, after which the minimum wage would be indexed to inflation.

“Not only would this measure give Washington the nation’s highest minimum wage, but it assures an annual increase in the minimum wage without regard to need or justification,” says Carolyn Logue, Washington state director of the business federation.

“This automatic-pilot minimum wage increase means we cannot even consider the need for future minimum wage increases - they will just happen automatically,” she complains.

The lobbyist said Washington businesses will have to shell out $200 million more to minimum-wage workers. But the wage hike will “primarily benefit younger workers living with their parents who are not the primary breadwinners in the family.”

“The major accomplishment of this dramatic minimum-wage increase,” Logue said, “will be to deter smaller firms from hiring new and part-time workers. They will simply do what they must to avoid the higher labor costs. This will cause a loss of job opportunities at the lower end of the wage scale.”

Organizers of the initiative effort to hike the minimum wage said they had expected a big counteroffensive by lobbyists for restaurant owners, retailers and other small businesses.

The NFIB says its 17,000 Washington members employ nearly 200,000 workers. NFIB also claims to be the largest small-business advocacy organization in Washington State and in the nation.

The Employment Policies Institute describes itself as a sponsor of “nonpartisan research conducted by independent economists at major universities.” This study was conducted by economics professor David Macpherson of Florida State University.

He could not be reached for comment, but the institute’s chief economist in Washington, D.C., told me those who would benefit most from a minimum wage hike in this state “are not those who need it most.”

“Fewer than 20 percent of those affected by this wage increases are primary breadwinners trying to raise a family on the minimum wage,” said economist Rebel A. Cole, who directed the research.

A profile of minimum-wage workers shows:

Half are 16 to 24.

A third live with parents.

Average family income is $35,682.

Half never married.

The average never went past high school.

Over half work part time.

They average 29 hours a week.

“Most are wives or teenagers with jobs in addition to those of the primary breadwinner,” said Cole.

But most who would be fired or displaced are primary breadwinners. These low-skilled adults will be replaced with more capable teenagers, said Cole. He cited various studies which attempt to show that more employers will automate, service will suffer, lines in restaurants will grow, business expansion will slow.

The institute also opposes a Clinton Administration proposal to raise the national minimum wage to $6.15.

Local author enjoys national spotlight

When a local author sells 150,000 copies of a book, that’s a business story.

Michael Gurian, a Spokane therapist and self-styled “father of the boys movement in the U.S.,” has been making national news with pop-psychology books on bringing up Johnny.

The Wonder of Boys spent more than a year on various best seller lists around the country and sold in excess of 150,000 copies, Gurian says. His current effort, A Fine Young Man, rated a two-page spread with photos in the July 20 issue of Time magazine.

Cameron named interim V.P. at EWU

Alex Cameron has been named interim vice president for business and finance at Eastern Washington University, replacing Michael Stewart, who retired.

Cameron chairs the accounting department and was associate dean of the College of Business and Public Administration until last year.

He will receive a salary of $93,000. New duties include overall responsibility for housing, dining and physical operation of the university.

Before joining EWU in 1981, Cameron was director of corporate planning and business analyst for Bunker Hill Mining Co.