Minimum Wage

Three weeks back, my good friend Randi Thompson wrote an opinion piece about minimum wage legislation on this page. This is a concurring opinion and I would strongly recommend that you also read Randi’s piece to fully understand the ramifications of this poorly thought out bill which is being considered by our legislature.

A good tax (assuming there is one) has two essential components. First, is the tax must be low and spread across the broadest spectrum of the population. Second, the tax must not distort the market system which is essential to economic success. The proposed legislation, which is essentially a tax on businesses that employ low skilled workers, violates both these fundamental principles. This tax disproportionally impacts small retail businesses like McDonalds and the corner carwash while leaving the costs of a vast majority of other businesses untouched. It picks winners and losers, favors Vegas (where the cost of living is high) over Elko (where the cost of living is low). This is one of the reasons why even extreme liberals like Warren Buffett and Bill Gates are on the record as opposing a minimum wage increase.

Employees should be compensated based on their skills, not based on their needs — and certainly not based on a government mandate. Wages are based on a worker’s ability to generate revenues and profits. The American dream doesn’t promise any of us success, it merely offers opportunities. To take advantage of such opportunities, we need to develop skills. If one wants to make more money, there are plenty of opportunities even if they don’t have the time or desire to pursue a traditional four-year degree. Many skilled vocations like plumbing and sheet metal work typically pay over $30 an hour.

Speaking of four-year degrees, a graduate from UNR working as a Marketing Coordinator makes an average hourly rate of just over $19 according to Payscale. That’s after four years (or more) of college full time and spending close to $90,000 on average on that education. By raising the minimum wage to $15, this legislation lowers the incentive for college education. Who would want to spend four years of their life and $90,000 when the difference is a mere $4 an hour?

One final point. I am disappointed that we are even having this conversation. We are the country that put a man on the moon, built planes that fly faster than the speed of sound, launched Global Positioning Systems that can pinpoint a location within inches. Eight of the top 10 (and 266 of the Top 400) richest Americans on Forbes’ 2016 list are self-made people who started with nothing. As a nation and as a people, we are aspirational. We strive for greatness, not mediocrity. We set high goals, work hard and make sacrifices along the way to achieve them. We don’t need a government mandate to set a minimum wage. We need government to get out of the way so “We The People” have the sky as our only limit. It’s time to end this “soft bigotry of low expectations”.