David Dauer – 2/19/06

This page was last updated on February 25 2006.

Drop the minimum wage; David Dauer; Beaver County Times; February 19, 2006.

Below is a detailed critique of the letter.

“In response to state Rep. Frank LaGrotta’s Feb. 3 letter on raising the minimum wage:

“After our new minimum-wage law goes into effect, only five states will have higher minimum wages than Pennsylvania. They all have a much higher cost of living than Pennsylvania.

“Here is what will happen when the minimum wage goes up 36 percent - the cost of living in this area will go up a minimum of 18 percent, and, more than likely, it will be in the 20s.”

[RWC] While it’s true raising the minimum wage hurts, there’s no way Mr. Dauer can support his figures or his following specific claims. What makes it impossible to predict the exact results of an increase is that businesses can deal with an increase in various ways. What makes sense for one business may not be right for another. For example, while one business may immediately cut jobs, another may simply slow hiring, increase prices, et cetera.

“Businesses do not have the latitude to handle this big of an increase. Many businesses will close, expansion plans will be put on hold, and the minimum-wage people will be the first ones to lose their jobs.

“For what? After the cost-of-living increase, minimum-wage workers who still have jobs will not have made that much of a gain. Senior citizens living on fixed incomes will be hurt, too.

“If LaGrotta wants to help, he would drop the state’s minimum-wage law altogether and make Pennsylvania a right-to-work state. This will create job growth.

“Pennsylvania is No. 47 in job creation. We have been losing jobs for years. That is why we are in this mess. Stop treating big business as the enemy. Work at getting them to come back into the state.

“Texas, Georgia, Arizona and Nevada lead the nation in both job creation and in being recognized as business friendly states. They are all right-to-work states. If Pennsylvania was a business-friendly state, it could have had the new Toyota truck plant that Texas is getting.

“A new plant in Beaver County hiring 15,000 workers will do more good than raising the minimum wage, putting in gambling casinos, etc. Fix the root of the problem. Make Pennsylvania big-business-friendly.”

[RWC] Mr. Dauer comes off the tracks with his focus on “big business” for three reasons.

First, he would have hit the mark if he had omitted “big” because the vast majority of employees work for “small” businesses. As of 2004, 89% of us worked for businesses employing less than 1,000; 56% of us worked for businesses employing less than 100. I’d rather have a bunch of small businesses employing 15,000 than have one big one. Didn’t Mr. Dauer learn anything from our local experience with U.S. Airways and the steel industry?

Second, he makes a tactical error by making “business friendliness” a “big business” issue, which it is not. Even when your position is unquestionably correct, your cause is in trouble because a lot of us want to “stick it” to so-called “big business.”

Third, being friendly to “big business” doesn’t necessarily make you business friendly. You can be friendly to big business by throwing special grants and tax deals their way to keep or lure them. Politicians love this because it gives them photo ops and bestows them with power. While politicians are handing out tax dollars to chosen businesses, the overall business environment can continue to be hostile to business in general.