By John Goodrich
The legislature is working toward mandating a universal $15 an hour minimum wage. I have been in a position to see the real effects of such a step.
For many years I led a major St. Johnsbury manufacturing firm with as many as 300+ employees and as interim CEO at a St. Albans plant of 160 employees. Proudly, we paid attractive wages, plus benefits, to promote strong work forces at both sites. From my experience I can testify that the desired outcomes of a mandated minimum wage would be perversely harmful to those needing a job and a wage.
The business owners and entrepreneurs constantly must judge what pay rates will attract workers with potential, consistent with business risk and competitive sustainability. Those eager to impose an arbitrary $15 minimum wage are not collectively qualified to apply such judgments to the many and varied businesses throughout our state. The backers of the $15/hr minimum wage extol the benefit granted to those whose pay will be raised by the law and may sincerely believe they are doing low-skilled wage earners a favor by politically increasing their paychecks to above-market levels. All too often, though, backers ignore the question: what good and what harm will come of it?
If the bill passes, there will actually be two minimum wages: $15/hr for those who the firm can afford to keep at the higher rate, and $0 for those who lose their jobs or are never hired. Many will not receive the raise and no longer work at all because their job did not deliver $15/hr worth of value to the business. The job is lost. Legislation advocates give little heed to the owner of a business or the entrepreneur who must make ends meet. Owners constantly consider the competition and the pricing of their products. An owner may elect not to hire someone at the mandated wage rate because it will cripple the business’s position against their competitors outside Vermont, thus reducing profits essential for needed investment and growth. The added payroll cost, priced into the product, could render the business non-competitive and unsustainable.
My first job with a paycheck was in a grocery store in Littleton, NH at age 16, in the mid-1960s. It paid $0.90/hr. I knew it was not yielding a fat paycheck. However, the values that jobs like that taught teens like me were invaluable life lessons. We learned that conscientiously doing a job, acquiring more skills and experience, and climbing up the ladder would lead to increasing incomes. I would not trade a minute of those experiences that taught me habits and principles that favored me throughout my working life. If the New Hampshire minimum wage in those days had been say $3.00, I almost surely would not have had the opportunity to profit so richly from those lessons.
Like me in the 1960s, today’s teens are tomorrow’s work force and business creators. In each competitive marketplace a company must make a profit to exist and survive. Those entry positions rarely provide value enough to justify $15/hr. The digital age has transformed the workplace in many ways, but basic skills remain indispensable. Those skills include: literacy, showing up on time, ready to work; meeting the expectations of job performance; completing assignments cheerfully and on schedule; pitching in when the chips are down; welcoming and helping the customers who make the job possible; learning to give just a bit more than expected; and being loyal to the business. Akin to riding a bike, training wheels are first needed, and the skill to ride without those wheels takes time to develop. Entry level people must similarly acquire the experience, work habits, and results that make them more valuable to the company.
The legislation threatens to drive out of business the small shops and restaurants that cannot survive political manipulation of their costs. Their disappearance will destroy many entry level opportunities. A foundational building block of our nation is the liberty we have to pursue happiness. When the government imposes costly mandates like an artificial minimum wage, both the small business and people seeking jobs lose out. Politically mandated wages may benefit some employees, but the mandate harms many, especially the young recruits eager to prove themselves worthy of increased trust and opportunity. Perhaps some wage earners will advance to the $15/hr level, but the price paid in lost opportunity for the “newbies” starting out will lead to a weaker, not stronger, economy and society.
John Goodrich is the retired Site Manager and CEO of two large Vermont plants. He lives in St. Johnsbury and is a director of the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.
6 week paid vacations will be much appreciated when that passes too.
Can’t wait
I explained to an employee why a forced $15 per hour minimum wage is a bad idea this way:
If the law requires me to only pay my employee $15 per hour that’s all I will pay. They asked why. My answer is blunt. If “government” is going to dictate how much I must pay employees, than that is what I will pay, and it is all I will pay. If I am forced by law to pay a certain minimum amount, than that’s what they will get and it’s all they will get. I further explained that if the “government” is going to tell me how to run my business or face consequences of the loss of my money via fines or even my freedom via imprisonment, than maybe I’ll just cut it back to one employee (myself) or close it and try to save what I have earned thus far.
Ultimately, the end result is a loss of employment opportunities for citizens and loss of tax revenue for the state. I am not in business to be a social experiment or jobs program for the “government”.
At the same time,do you believe taxpayers should be subsidizing your business by providing food stamps,health care,and section 8 housing because they don’t earn enough?
You, obviously, have never owned and operated a business. I pay my employees what they are worth and they are entitled to every cent because they’ve earned it. When “government” decides what I am obligated to pay them than that is what they will receive. If I, as the employer, must now be obligated to guarantee an illusionary standard of living as dictated by the “government” , than that is what I will pay, because “government” had dictated that I do not have to pay more. Not only will entry level job opportunities dry up, due to the prohibitive wage costs, but lower wage earners will see fewer income advancement opportunities because the “government” has dictated how much I, as an employer, are legally required to pay them.
The best social program in the world is a job where the employee has the opportunity to learn, advance and make themselves more valuable. Government mandates cripple that opportunity and leave only a minimum obligation to be met.
The business paying the wage isn’t the one subsidized, it’s the individual receiving the handout. Maybe Mr Redfern should start a business, then he would be free to pay as much as he would like.
Great piece, written by someone who gets it, an experienced employer.
How can a young first job youth climb the wage/earnings ladder – if we saw off the first 5 rungs?
How many of our legislators have signed the front of a paycheck, and done the onerous paperwork that comes with even a single employee?
Bring on the robots. See that McDonald’s have robots to flip hamburgs now in certain places. It’s called evolution. Forced taxation (that includes Gov demand wages) will result in innovation. Companies want to stay in business and produce a service, Gov policies are an exact opposite. So to get around Gov policies modify how businesses operate. Interesting to see robots make a vehicle, very few people around.
Gov has leaned the basics of an economy and it’s function. VT will tax the robots via the sales tax when the equipment is bought, then a business freedom. NH doesn’t have a equipment purchase tax.
Under the Dome, 180 (but not all) brain dead bodies. Tax, Regulate and Spend.
Sorry typo error. “Gov has leaned the basics” should read HASN’T.
Don’t know why, haven’t had a glass of wine yet. Blame it on the kumputr.
at 9:41 am souldn’t it be kauphy?
$15 a hr ends up hurting the one’s the Regressives claim to be helping. The working Poor also students and Retirees that have to still work to pay over burdensome prop tax and Retirees that pay for home nurse/helpers.
Not only people but the small local business that cannot afford to pay help and still sell competitive
wares/service. It’s not Buy Local any longer it’s now By By Local…
The stupidity of the leftist Fascist clown car in montpeculiar is only topped by the same entity in DC.
ASSAULT AGENDA ON STEROIDS
Progressives love chaos and the power that comes through vacuums, and the workers who aren’t worth $15 will become their wards. See how it works? #underminingVermontAmerica
The headline to this article tells the tale.
Yes, increasing the minimum wage will benefit Vermont (at least in the short term), because wage earners across the board will find themselves migrating to higher income levels – and paying more taxes. That benefits Vermont. But it does not benefit Vermonters.
All you have to do is see the example of places that all ready put in 15 an hour. In Seattle part time for college students and Seniors dried up and also entry-level jobs. You can’t work your way up without entry-level.While more counter jobs in restaurants were replaced by machines.
I don’t vote them in and never have. Many Vermont voters would rather signal their virtue and feel good about themselves so they vote for progressives and believe them as they destroy what’s left of Vermont. We have voters who are too lazy to learn about anything and only vote for democrats because their father did. Voters vote for the names they recognize and we have Vermonters too lazy to vote but not to lazy to bitch about their government. I would suppose that insane people probably have no idea they are crazy. While Vermont voters continue to vote progressives into office they continue to get the same results but expect their lives to be better but it never happens.This is the definition of crazy and apparently this is also the definition of the Vermont voter.
I should have said the majority of Vermont voters. There are many of us who do not support what’s happening.
There is a motive to pricing the unskilled out of the labor market. It produces a large body of government benefit dependent unemployable voters who may never achieve employable skills or a work history, will reliable vote for candidates promising economically unfeasible benefit plans and will provide incentive for expanding law enforcement. The higher minimum wage is a proclaimed Progressive policy, and the aforesaid explains why.
Vermont, get used of these type of signs or the other sign ” moving ” because of
High property tax, sales tax, gas tax, food tax, room& meals and the list goes on.
One would think with all the Taxes, Vermont would be a Debt Free State …. Nope.
Maybe a large scale business can or could support $15, but small businesses
will fold ………….yup ” Out Of Business”
Vermont’s Progressive Legislators, you vote them in !!