The Right Way To Raise Minimum Wages

How does one increase the minimum wage? There are two ways: the inefficient and destructive way or allowing the market to work. The first is what most politicians do routinely by pushing for laws to raise the minimum wage since it is very popular among voters and it gives everyone a warm fuzzy feeling. Then there is the North Dakota way: encourage economic growth and don’t be afraid to develop the natural resources of your state.

While the yahoo brigade marches in the street demanding the government raise their wages, North Dakotans simply go work on the oil field and voila, there is no need for a minimum wage law. What has happened in North Dakota is the result of the energy revolution that is happening in America. The oil fields are allowing workers to make good money and the job market is overly tight, which allows many entry level jobs to start at 14 dollars an hour.

Cashier positions at the local Wal-Mart are being paid over 17 dollars an hour, and over the past decade, personal income has doubled in North Dakota. The key issue that is often overlooked is that economic growth is the key to raising wages at the lower end.

The one thing that politicians tend to forget is that if you raise minimum wage beyond what the market determines it to be, then you will see more unemployment at the lower end since you are raising the cost of hiring the least experienced. There is a reason that those at the lower end get paid lower wages, because they lack experience and the younger workers tend to be not only inexperienced but also less dependable compared to older and more experienced workers.

Artificially raising the minimum wage does have a negative effect on those workers who can least afford it: younger workers and minorities, and that is the rub. The movement among many localities, along with Congress on a national basis, is not based on economics, and it is more destructive to the very workers who many on the left claim they are for when they push fpr a minimum wage beyond what the market will pay.

North Dakota has shown us how to raise the minimum wage and grow the economy. In North Dakota, that means developing its resources. Energy development is leading to jobs and opportunities for many, including those at the lower end of the wage earners.