Editorial by State Director Suzanne Budge
Few, if any, state policies cause more contortions and conniption fits than the minimum wage. Right now, California is in the throes of a minimum wage madness of its own creation. Also, right now, Idaho is not, because of a couple of things it got right.
Any discussion about the minimum wage must, by necessity, start with what it is and what it is not, because public perception has been too far skewed in favor of sweet sentimentality and not everyday reality.
The minimum wage has been, is now, and will always be an entry level wage earned mostly by teens and young adults starting out on their work lives. With extremely rare exceptions, it is not the salary mature adults are raising whole families on.
A good beginning point for anyone wanting to delve more deeply into the issue is the Characteristics of minimum wage workers, 2023 report put out by the U.S. Bureau of Labor Statistics. There, you will find its top point, “Minimum wage workers tend to be young. Although workers under age 25 represented one-fifth of hourly paid workers, they made up 44 percent of those paid the federal minimum wage or less. Among employed teenagers (ages 16 to 19) paid by the hour, 3 percent earned the minimum wage or less, compared with just under 1 percent of workers age 25 and older.”
Two other important facts about the minimum wage need to be stated to properly inform discussions of the issue.
One is “minimum wage earners are not a uniformly poor and struggling group,” writes economist Jeffrey Dorfman. “Many are teenagers from middle class families and many more are sharing the burden of providing for their families, not carrying the load all by themselves.” And, reports David Neumark for the Federal Reserve Bank of San Francisco, “… evidence simply does not provide a strong case for using minimum wages to reduce poverty.”
Now, back to California, where policymakers have draped a crazy quilt of minimum wage laws over the state. A new minimum-wage rate of $25 an hour for the lowest-paid health-care workers (a group that includes janitors, housekeeping staff, groundskeepers, and gift shop workers, to name a few) was to have taken effect June 1 until a massive state budget delayed its implementation.
Earlier this year, California, always in a hurry to show its specialness, boosted the minimum wage of fast-food workers to $20 an hour with predictable effect, as this headline in the Los Angeles Times encapsulates, Rubio’s Coastal Grill, citing rising business costs, abruptly shuts down 48 restaurants in California.
Because California allows cities and counties to set their own minimum-wage rates, West Hollywood on July 1 made sure it held on to the title of highest minimum-wage rate of any city in the nation at $19.61 an hour. But wait. That’s only for hotel workers. No one else.
The Idaho difference.
Having different minimum-wage rates for different areas of a state and for different occupations and industries, and all the commensurate chaos that would ensue, is something the Idaho Legislature wisely avoided eight years ago by passing House Bill 463 during the 2016 session.
“The purpose of this legislation is to clarify Idaho law to ensure that the minimum wage in Idaho is decided by the legislature and applied uniformly across the state,” read the legislation’s Statement of Purpose. The law also linked the state’s minimum-wage rate to the federal government’s rate.
Small-business owners have been reporting record highs in the levels of compensation they’re offering to recruit and retain employees (read: far above the minimum wage) even for those teens and young adults starting out on their work lives.
And, the state is recording record highs in compensation, as the Idaho Dept. of Labor reported in May, “Idaho’s average wage for all occupations was $26.75 per hour in 2023 … an increase of 8.3%, or $2.06 per hour, from the year prior.”
Imagine that. The marketplace is still the best arbiter of wages, not the policy poohbahs of Sacramento.
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Suzanne Budge has been Idaho state director for the National Federation of Independent Business (NFIB), the nation’s largest small business association, for 20 years. Budge is also the president and founder of SBS Associates, LLC, a Boise-based governmental affairs firm. A native Idahoan, her father, Sen. Reed Budge, served as a president pro tempore of the Idaho State Senate.
