Is Santa Fe’s “living wage” a disaster or not?

It is the 10th anniversary of Santa Fe’s so-called “living wage.” The Albuquerque Journal covered the anniversary today and concluded that “results are mixed.”

Fair enough. It is hard to say that raising the minimum wage is a “disaster,” but when such a small portion of workers earn the minimum wage and those happen to be the most marginal, least-productive workers in the economy, it would take a truly outlandish minimum wage hike to be a “disaster.”

But that doesn’t mean that higher minimum wages are harmless or somehow beneficial as we have pointed out regarding younger workers in Santa Fe.

Ironically, while mom-and-pop businesses in Santa Fe are forced to pay $10.66 an hour, their elected officials in Washington with unlimited claims on the United States Treasury pay some of their workers nothing.

It is also sad, per the anecdote at the conclusion of the Journal article, that a young person would pick up and move all the way from North Carolina to work in fast food. Rather than relying on government mandates to increase one’s pay, wouldn’t she be better off studying part time to gain an associates degree in some kind of skilled trade (plumbing, welding, electrician, hair-stylist) where there is a real future rather than using those scarce resources to pick up an move her entire family for another unskilled, low-wage job?

Regardless of minimum wage policies, there are modest disparities in pay levels for even unskilled work, but the long-term impact of a few $$ an hour raise as opposed to a long-term increase in skills and marketability is minimal.

Overall, conservatives shouldn’t blow the impact of increased minimum wages out of proportion in terms of overall economic impact, but that doesn’t make it good policy either.

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