Today’s Wall Street Journal takes a look at Oregon, where voters in 2002 opted to raise the minimum wage to $6.90 per hour, and index it to cost-of-living increases in subsequent years.
As the article notes, academic economists tend to believe that raising the minimum wages stifles the creation of new jobs—but apparently it doesn’t always play out that way in practice. In Oregon, for example, unemployment fell and wages rose after the minimum wage was increased (though I’m sure that the doomsayers would say that neither trend has anything to with the state’s minimum wage policy).
Leaving that debate aside, take a look at this snippet:
Foes say Oregon has hurt its ability to attract and retain business, and warn that the effects will be long-term. Restaurant and farm industries argue that voters didn’t understand that indexing meant businesses would have to keep raising wages. [Emphasis added.]
Uh, maybe someone’s been misquoted, or maybe I’m just too dumb to follow the logic.
But to me, indexing the minimum wage to inflation doesn’t mean that businesses “have to keep raising wages.” It means that they can’t keep lowering wages.
The math isn’t complicated, folks—if inflation goes up, but your salary doesn’t, then you’ve gotten a pay cut. Simple as that. So Oregon didn’t vote for continual increases in the minimum wage. It voted to keep the minimum wage steady. To claim otherwise is sleight of hand—and dopey sleight of hand, at that.