Warren Buffett weighs in on the federal minimum wage.
“If you could have a minimum wage of $15 and it didn’t hurt anything else, I would love it,” he said. “But clearly that isn’t the case.”
However, he added, he wouldn’t argue with President Obama’s proposal for a more modest increase, to $10.10 an hour from $7.25 an hour currently.
While Buffett goes on to see he doubts most of the impact studies being circulated, he clearly recognizes the likelihood of negative economic and employment consequences associated with the bump to $15.
Washington Speaker of the House Frank Chopp supports a minimum wage hike, but he says the issue wasn’t ready for a vote on the House floor this year.
“I think it was important to start the conversation and have a good discussion and figure out where there’s consensus over moving forward because if you’re working you shouldn’t be poor,” said Chopp.
Last week, on Bloomberg, Joni Balter wrote of Washington state as a place where a higher minimum wage hasn’t killed jobs. She may be protesting too much. Washington Restaurant Association president Anthony Anton points out one clear impact.
Long before the recession began, Washington restaurants had made major adjustments to their businesses to survive the fallout of operating in the highest minimum wage state in the country, with no reasonable exceptions. U.S. restaurants average more than 17 employees per unit. Washington? We average just over 14. There are more than 13,000 restaurants in our state, equaling 39,000 jobs that we effectively have eliminated for just the cost of a few dimes.
There’s more. Anton’s article is worth your time.
Finally, James Pethokoukis asks the question others should be asking: Why are minimum wage proponents dismissing automation risk?
As MIT’s Erik Brynjolfsson and Andrew McAfee, authors of The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies told me recently: “There’s no economic law that says everyone’s going to benefit from technological progress, even as the pie gets bigger. It’s possible for some people, even a majority of people, to be made worse off.” While some low-skill jobs might be automation proof, what about retail and fast food? Indeed, Brynjolfsson and McAfee support helping workers via a greatly expanded EITC. Subsidize work, don’t raise the cost of hiring.
Pushing for an unprecedented boost in the minimum wage given both the weak economy and automation risk seems like foolhardy public policy.