Wage meddling will have ripple effect
Be afraid; be very afraid.
Something is happening in the city of Spokane that could eventually affect the people who live, work and shop in Spokane Valley and throughout this area.
The Spokane City Council has approved the gathering of signatures for a potential vote on a proposal to require big-box stores to pay up to 165 percent of the state minimum wage.
You might be thinking, what is wrong with that? Making $12.58 an hour instead of $7.63 is a good thing, isn’t it? Of course it is, but how that increase occurs is the issue.
In America, and that includes the city of Spokane, we live in a capitalist society where private individuals own land and businesses and operate them for a profit. The market mainly determines what goods are sold at what prices. Pay (wages) is set between employees and management at individual firms. Usually that pay is based on performance and difficulty of the task.
The workers apply their skills, efforts and resources to a productive purpose. They, in effect, produce goods and services for others and income for themselves. When those employees perform at a certain skill level, they then negotiate with management for a wage appropriate to that skill level.
The plan in Spokane, as initiated by a local nonprofit group, proposes that certain companies within the city pay a minimum wage of $10.30 an hour, with benefits, or $12.58 an hour, without benefits. This would apply to companies of at least 95,000 square feet, which include Target, Nordstrom, J.C. Penney Co. and Wal-Mart.
The City Council gave approval for the nonprofit group to gather signatures to put Initiative 2006-1 on the ballot. If enough signatures are gathered, residents will vote on the plan. What could be better than that, you ask? If the voters determine the outcome, that is a good thing isn’t it? Sometimes it is and sometimes it is not.
The minimum wage in Washington was $7.01 per hour in 2003. Today it is $7.63 per hour. Next year it will go up and the year after, ad infinitum, because voters approved an initiative to tie minimum wage increases to inflation.
Some would say that has caused businesses to hire fewer people and eliminate jobs. Others may say that it has driven up prices because of an increase in the cost of doing business.
Proponents of a higher minimum wage say it is difficult to live on minimum wage. It is not sufficient for gas, health-related expenses, rent, etc. No argument here.
The solution, however, is not in government dictating what a living wage should be and who should pay it. Government concerns should be focused on better educating and training its citizens so they can do better than a minimum wage job.
According to an article in the newspaper, a regional economist estimated that only a few hundred Spokane employees currently make minimum wage. Since it was reported that most of them are part-time workers in fast-food and small business jobs, why not devote efforts toward preparing them for more highly skilled jobs?
Even though this issue is being put forth as an initiative, is it fair to single out specific businesses? I think not!
Typically, the government in a capitalist system regulates business largely by telling firms what not to do. I don’t think elected officials and the public know more about what big-box stores should pay employees than the people running those organizations.
If the initiative passes, maybe it will cause those stores to move to Spokane Valley or other cities. I am rather certain that owners of stores at 95,000 square feet and larger will not want to build in Spokane.
If the motivation for this proposal is “poverty” and “respecting the low-wage worker” as stated in the newspaper, this is not the way to do it. If the motivation is to punish Wal-Mart because they want to build on the South Hill and in north Spokane, then this proposal is definitely misguided.