28.12.04

THE "LIVING WAGE" FANTASY. Mungowitz End:

If you raise pay from $6.00 / hour to $14.00 / hour or more (why not abolish gravity, while we are at it?), poor people are going to be driven out. Right now, if a job opening is announced at a university for housekeepers, there are 10 or more applicants, and that is for a very low rate of pay.

But everyone who applies is economically marginal. History of firings, periods out of the work force, little relevant experience, that sort of thing. How about if the job paid $14 / hour? Hundreds of applicants, and many of them are NOT economically marginal. Over time, all of the economically marginal people, with problems with absenteeism, punctuality, health difficulties, will be squeezed out. “Living Wage” will not be enjoyed by those now working at minimum wage, but by those whose skills can command that wage in the marketplace.

None of which deters the city fathers of Madison, Wisconsin, where a local living wage ordinance is to take effect.
At issue is a waging of political wills over the first Wisconsin increase in the minimum wage since it rose to $5.15 an hour in September 1997. The Madison mayor and Common Council have agreed to boost the rate to $5.70 an hour Jan. 1, then to $6.50 a year later, to $7.25 in January 2007. In January 2008, it would go to $7.75 an hour and adjust for inflation.
The usual suspects can be counted on to raise the usual objections.
But the business associations, calling themselves Main Street Coalition for Economic Growth Inc., are challenging the city’s authority to raise its minimum wage independent of the statewide rate. They have filed a lawsuit seeking a restraining order against the Madison wage increase.
Sometimes the way to demonstrate the folly of the law is to comply with it. Madison is close enough to reality for reality to demonstrate more job opportunities than will be observed in Madison.

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