Wage bill: think again
Feb 13, 2014 | 4233 views | 0 0 comments | 344 344 recommendations | email to a friend | print
“Give a man a fish and you feed him for a day.

Teach a man to fish and you feed him for a lifetime.”

Chinese proverb

Sometimes, when legislators are drafting a bill with the hopes it becoming law, the men and women who created the legislation get caught up in the mechanics of what they are drafting and miss the bigger picture. By doing so, alternative ways to reach the same goal are often missed or dismissed, because the words on the document have taken on a life of their own, to the exclusion of any other ideas, approaches, or methods.

There are countless examples of such bills becoming larger than life, and then becoming law, with unintended consequences that sometimes overwhelm the original intent of the legislation. Vermont’s education funding laws, Act 60 and Act 68, come to mind. We’ve cited many times in this space how the bills have become sacred cows in Vermont, with politicians unwilling to look at the outcomes and impacts the laws have had during the past 17 years, even though there is ample evidence to conclude much of the original intent of Act 60, as handed down in the state supreme court’s Brigham decision, has been lost.

We think a similar scenario will play out if the Legislature continues to pursue the “living wage” bills currently wending their way through the Statehouse. In brief, the proposed legislation would increase the minimum wage in Vermont to $15 per hour, almost doubling the current minimum wage of $8.73. Legislators who support the bill cite numbers that show this is the bottom line amount that would allow workers to make ends meet, based on the current cost-of-living indexes. Those supporters say the law is needed to help those on the bottom get a hand up.

Needless to say, there are many who predict dire consequences should the bill pass, mostly in terms of job loss and capital flight from the state.

In our opinion, supporters of the bill are looking at the problem all wrong.

Why on earth would we force businesses to pay more for unskilled labor? In general, we believe that any living wage bill would require a big pay raise for those who have the fewest skills. That just doesn’t seem right, and runs counter to the way our workforce and education systems have been structured during the past 150 years, since the dawn of the industrial revolution. Workers with the most skills and ambition, or both, tend to rise to the top of the earnings scale.

Youth have been told to work hard, become educated, learn a trade or a skill, and become marketable. The idea of an unskilled young adult fresh out of high school, or even a dropout who doesn’t complete school, should be compensated at such a high rate just doesn’t make good business sense, for private enterprise or government.

Instead of forcing money down to the bottom, we should be focusing on developing a more skilled workforce. Those skilled workers will then be able to compete for jobs that will pay a living wage, or much more than a living wage. It’s not just a college education that should be rewarded. Trade schools are an often-forgotten path to a middle class lifestyle. Plumber, electricians, auto mechanics, and other hands-on professionals are always in demand, and can earn a really good living with those or similar skills.

Rather than mandate an arbitrary, elevated-wage bottom line for businesses, how about mandating post-secondary trade school training, advanced education or military service? Our youth need to learn skills that are useful in the greater society. For those already in the workforce, there should be easier opportunities to increase their skill sets to they can move into better jobs.

Of course, not everyone wants to be told what to do. That’s where conflicts often arise when legislation is proposed. Certainly there would be many youth, and their families, who would chafe at the idea that they would be forced to continue their education or training in some manner beyond high school. But under the current proposal, it’s the business community that would be told what to do, and would have to either cut jobs, raise prices or accept low-skilled employees at a relatively high wage scale.

But that’s the rub. Someone will have to be told they have to do something they may not want to do.

It just seems that rather than creating a downward spiral of job loss, there could be a way to raise the level of workers entering the workforce, which would create competition for those workers, which would in turn increase real wages, while increasing productivity and business competitiveness.

For those legislators who feel they must do something to raise the standard of living in Vermont, we urge them to look beyond merely raising the bottom line for workers, and instead find a more creative way to raise workers’ abilities and increase demand for their skills.

That would be good business for everyone.
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