Washington State Minimum Wage: Is it Too High? Good For Business?
If you enjoy instigating a heated debate where passions flare and no consensus is achieved between either stubborn party, bring up the minimum wage.
How does Washington State compare to the rest of the nation when it comes to the minimum wage?
How Does Washington State Rank in Minimum Wage in the US?
This may not be surprising to some, certainly, it wasn't to me, that Washington State leads the nation with the highest minimum wage. The folks in Olympia are experts at doling out the cash. Generally, this is done by taxation, and they get very creative in doing so. For example, the most recent legislative session produced a new Capital Gains Tax, which is obviously a tax on income, but they've called it an 'Excise Tax'.
That's not in step with the other 49 states, the federal government, or even the IRS. But hey, it's Olympia. It's the water - and a lot more. So, yes, the Washington State minimum wage as of January 2023 is $15.74 per hour, more than double the federal minimum wage which is at $7.25.
Is Higher Minimum Wage Good For The Economy, Business, and Workers?
This is where you can have a great deal of guilty-pleasure-satisfaction by sitting back and listening to the hysterical debate between folks who have opposing views on the subject. Senator Bernie Sanders has built a cult following with his old and tired have versus the have-nots. Many small business owners will tell you about the real-world negative impact that growing costs has on their businesses. These business owners can't just print more money or tap into taxpayer pocketbooks to make ends meet.
Rising employee costs, including the rise in the minimum wage, have left many employers with a tough decision: lose profits or cut hours and jobs. Many argue that workers should be paid a living wage. This statement may be true, but under what circumstances? Minimum wage standards were never intended to be anything more than a starting point. What about the 16-year-old who is just learning to flip burgers? Should they earn nearly $33k per year just starting out? That's what $15.74 per hour equates to for a 40-hour work week.
Why Do 72% of US-Based Economists Oppose a $15 Per Hour Minumum Wage?
Because it's a lousy idea, that's why. Some folks may try to put lipstick on the pig by saying a higher minimum wage is good for the economy because it increases discretionary spending, puts more money into the economy, and benefits small businesses in particular, since most of those dollars spent wind up in local tills. Balderdash. Anyone who says such things have likely never owned and operated a small business where they signed the front of a paycheck, took a risk, bore all of the responsibility, and had everything to lose.
72% of economists in the US have said they oppose the $15+ minimum wage. This is a no-brainer. Small businesses facing these kinds of forced increases in doing business must often endure increased costs, reduced profits, and a need to raise prices to the consumer, and unfortunately for everyone concerned, they often need to reduce their staff size. With a higher-than-appropriate minimum wage, there is reduced incentive for workers to work harder, acquire more skills, and work toward higher-paying opportunities.
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