Lower wage is better than unemployment

Posted on May 08, 2009

Editor, the Tribune:

Politicians’ “feel-good” rhetoric merely reinforces policies that result in unemployment for entry-level workers, especially in a weak economy (“Minimum-wage bill caps pay for waiters,” April 29). Allowing a lower wage for tipped workers who already earn above the minimum wage, counting tips, would stem that job loss.

Decades of research predicted there would be an increase in job losses after minimum-wage hikes, particularly among vulnerable groups like minority teens and adults without a high school diploma. In Missouri, where the cost of tipped workers remains high for employers and the minimum-wage increase is on “autopilot” each year, job loss for entry-level workers is inevitable. Accordingly, Missouri’s jobless rate has spiked 55 percent from March 2008 to March 2009.

Mandating higher labor prices without regard for what is happening in the economy forces employers to cut hours and axe some jobs entirely. A lower minimum wage that accounts for tips is much better than none at all.

Kristen Lopez Eastlick
senior economic analyst
Employment Policies Institute
1090 Vermont Ave., N.W.
No. 800, Washington, D.C.