Minimum Wage Increases

Posted on December 22, 2010

Letter to the Editor

To the editor:

On January 1, 2011 Washington’s minimum wage will increase for the tenth time in eleven years. As Carl Gipson noted in his November 29th guest column , it’s going to be even harder for teens to find an entry-level job -especially with the state’s teen unemployment rate still averaging over 33 percent.

Washington’s minimum wage is indexed to inflation, which means the cost to hire and train entry-level employees like teens rises almost every year. For labor-intensive businesses with low profit margins, like restaurants and grocery stores, even a seemingly small increase in labor costs can trigger unintended consequences.

As customers continue to demand low prices, employers respond by cutting staff hours or positions and -over time- are forced to turn to more cost-effective alternatives like automation and self-service.

The consequences for the teen job market are clear: new research from the United States Military Academy at West Point finds that each 10 percent increase in a state’s minimum wage decreases teen employment by 3.6 percent.

Michael Saltsman
Washington, DC