The Minimum Wage Increased Today. Ho-Hum.

The previous federal minimum wage was so low that it had little effect on the nation's economy, and particularly Utah. Which confirms my opinion that, instead of increasing the minimum wage, the government ought to be doing the kinds of things that government can do best--promoting the general welfare--so that business can thrive and grow amidst fair competition.

If the minimum wage is raised in a forest, and no one is there to hear it, does it make a sound?

The nation's lowest-paid workers will soon find extra money in their pockets as the minimum wage rises 70 cents to $5.85 an hour today, the first increase in a decade.

It ends the longest span without a federal minimum wage increase since it was enacted in 1938. The previous increase came in September 1997, when a bill signed by President Bill Clinton raised the minimum 40 cents, to $5.15 an hour.

Legislation signed by President Bush in May increases the wage 70 cents each summer until 2009, when all minimum-wage jobs will pay no less than $7.25 an hour.
Less than one percent of the members of the United States workforce earned only the previous minimum wage of $5.15, and a significant percentage of them were not primary breadwinners, including teenagers. (Admittedly, with the increase, more people will now make only the minimum wage--I don't have those statistics.)

Government figures show about 1.7 million people earned $5.15 or less in 2006.
Utah's economy is booming, so much that hardly anyone noticed the increase in the minimum wage.

with Utah's economy booming and an unemployment rate at 2.6 percent, few employers in the area pay minimum wage. Mark Knold, chief economist for the Utah Department of Workforce Services, said that in 2005, only 7,000 people earned minimum wage in the state, or 0.5 percent of the employed population.

Knold said now is the best time in Utah to have the minimum wage increase because it will have "no economic effect."

"The reality of it is in this explosive economy we have, (business owners) are having to pay more than minimum wage, and they're still in business," he said. "I don't think it's a very stressful thing to businesses."

...most businesses have to pay employees more than minimum wage due to the current scramble for workers. Marc Greeley, owner of Connie's Pizza in Salt Lake City, agrees.

The minimum wage, he said, "doesn't mess with me at all. I can't image anyone paying minimum wage."

In economic parlance there is a phrase: "The things seen versus the things unseen." Most people tend to go for solutions that are easy to see, without stopping to consider (a) how they affect other things, and (b) that there are unseen (more-difficult-to-understand) solutions that are better. It's extremely easy to see a minimum wage increase, and it's equally easy to feel good about something like that, because we can see it and 'get our hands around it'. It's a lot harder to see how much the economy would thrive if the government would just get out of the way.

But actually, that's the better solution. Utah's economy proves it.


  1. When it comes to the economy, sometimes it sounds as if we are living in different countries. Real wages have been declining since 2003. Maybe some long-overdue increases in the minimum wage will help jump-start the labor sector.

  2. We have a long way to go to get fair competition. Major US corporations receive huge government subsidies. Meanwhile, small businesses, both here and abroad, are left to fend for themselves and small businesses here are taxed to death.

  3. Richard and Elizabeth,

    I agree with both of you. Real wages are declining. And we need to get government to stop helping large corporations at the expense of the small ones. Government's job is to make it possible for the economy to run smoothly by mostly getting out of the way, not by playing favorites.


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