Publicola asked House Speaker Frank Chopp if he regretted not moving Rep. Jessyn Farrell’s proposed $12 statewide minimum wage last session. They publish his response here. This is the crux, but you’d benefit from reading it in context.
My goal is to pass an increased statewide minimum wage for Washington workers and families. I am actively working with my colleagues in the Legislature, labor leaders in the state, community members and other stakeholders to ensure the passage of a statewide minimum wage bill.
So with all the minimum wage sure to be top of mind for lawmakers, it’s worth debunking (again) the myth that Henry Ford paid his workers a then-whopping $5 a day so they could buy his cars. Tim Worstall does just that in Forbes.
Ford didn’t raise wages so that his workers could afford his cars. What actually happened is that he hired and then lost some 52,000 workers a year in order to have a stable workforce of 14,000. This obviously had vast costs in trying to hire and then train all of these workers: as well as the costs when they walked off the assembly line disrupting production. The doubling of wages to $5 a day reduced those costs by more than the extra pay cost him. Which is why he did it.
So does that mean the minimum wage should be increased to reduce turnover? No. Employers can do the math. Training costs vary. Turnover among low skill workers may be an acceptable cost, particularly as many of those jobs are not designed to be careers.
Worstall also takes a look at the argument that the minimum wage should rise with productivity.
There is no link at all between what the minimum wage should or should not be and average labour productivity. Even conceptually the link can only be between low skill labour productivity and that minimum wage. It’s entirely true to say that average labour productivity has risen in the US in recent decades. That’s as a result of the increased mechanisation of the way that we produce many things. But there’s no evidence at all that low skilled labour productivity has risen over that same period. And thus no argument that the minimum wage should have risen in lockstep with average productivity.