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My Turn: $7.25 an hour? That’s absurd!

The minimum wage debate rages every year or two. Presently, New Hampshire relies on the federal minimum wage. To a Republican like me, this makes no sense.

The same federal law is not suited for California, Mississippi, Alaska, Hawaii and New Hampshire. Republican philosophy holds the states as laboratories that engage in innovation in all areas. They also compete with one another for all that they deem good: an educated population, prosperity, increased commerce, new inventions and discoveries.

The present minimum wage – $7.25 per hour – is absurd for our state. I am not a fan of governing by popularity. The majority can be wrong and often is. The polls always favor an increase in minimum wage, even when it might not be sound economic policy. The better guide for a leader is science, history and true figures. Today, these considerations severely undermine the validity of the present minimum wage policy.

It is bad for our economy, our people, tax base and commercial development. No minimum-wage earner can survive on her salary. Tens of thousands of children receive benefits which subsidizes the parents’ dependence on the minimum wage. The Earned Income Credit is yet another goofball subsidy. Under this scheme if a wage earner does not have to pay taxes, he or she will get a check from the IRS for having worked. There are at least a dozen methods of diverting tax dollars from mostly the middle class to the lower economic class, because their wages are insufficient to survive.

During the last debate on the minimum wage, when I served in the New Hampshire House, I spoke in favor of a modest, graduated increase. For that I was demonized, called a stray dog, a backstabber, Judas and more.

Empowering people not to depend on the government and get a fair wage for the fruits of their labor is basic common sense.

Compare today’s minimum wage to the 1960s, using productivity, buying power or income divergence. According to these scientific measurements, the minimum wage should be between $22.75 and $33.25. These numbers are too high for a sudden or even a graduated target. Today’s economy is more skill- and knowledge-driven. Also, the inflationary impact would be unsustainable. However, a $1.50 increase would raise the final product price by a nickel for every $10. That is absorbable.

The increase would have a negligible temporary increase in unemployment. That is, negligible unless you are one being laid off. We can manage that by creating artificial temporary jobs, most desirably in partnership with private entities, until the adjustment. As of today, the working lower economic class has less buying power, is more productive, and lives in greater disparity with other classes, than in the 1960s.

(Tony Soltani, a former state representative, lives in Epsom.)

Legacy Comments3

Instead of imposing your good idea on everyone else, why not just start a business, and pay your employees more than the current minimum wage? You’ll have solved the second biggest problem in business, by having a plethora of dependable, qualified people anxious to work for you. If they add an appropriate amount of value to your product, you’ll also be able to solve the first problem in business, making a profit. And, every other businessman will follow you, effectively raising the minimum wage for everyone.

Wow, I didn't expect your conclusion when I started reading. I have a couple of disparate comments. ---- First, you really put the kibosh on the whole idea of democracy when you state "I am not a fan of governing by popularity. The majority can be wrong and often is." While I agree the majority is often (or at least sometimes) wrong, I think that's a necessary downside of democracy. ----- Second, I question your inflation statistics. In 1960 the Federal minimum wage was $1 per hour. According to the Bureau of Labor Statistics, $1 in 1960 is $7.89 now. I doubt than anybody working at a minimum wage then was doing any better than they are now. The difference is that then as a college student I was easily able to get a job driving a truck at union scale for $2.43 per hour, significantly above the minimum, which would be $19.17 today. It's pretty hard for a young student to get a summer job at or above $19 per hour today.

1- Governance by popularity is a valid, but not favored for of democracy ( Clinton method) . In a Republic, we elect or representatives not just to please us but remain informed and lead ( The Franklin school)). Both are practiced, I subscribe to the latter. 2- BOLS only adjusts for inflation according to the their own formula, which is rejected by nearly every economist. It is artificially low, and excludes most important factors. To gauge "buying power" you must adjust for other factors which according to their proportionate use by the average household determine real power of the earner to survive. Take the cost of housing, fuel, food, as the three major contributers. The power is lowest it has been since the first enactment of Minimum wage. Exhibit "A" for rejecting populist method.

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