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Opportunity
Village and Fewer Opportunities by
Doug French With majorities in the house and senate, Democrats are virtually certain to raise the minimum wage in early 2007. They have been attempting the increase for years, but Republicans have stood in the way. No longer. The head Republican, President George W. Bush, announced at a news conference: “I support the proposed $2.10 increase in minimum wage in a two-year period.” The President went on to say that he wants to pair the increase with “targeted tax and regulatory relief to help small businesses stay competitive,” proving that he doesn’t understand who is really hurt most by a minimum wage boost. Businesspeople aren’t successful if they can’t overcome the obstacles that government continually puts in their path or the pressure applied by competitors. Thus, a government mandate to increase the wage floor will put few business people, if any, out of business. Entrepreneurs will figure out a way to keep labor costs in line as they always have, using creative scheduling, mechanization and technology, etc. But the reaction to Nevada voters choosing to increase the Silver State’s minimum wage a dollar over the Federal minimum should give the President a clue. The most ardent fans of a minimum wage increase were horrified that the new law would affect non-profit organizations. “This is an unintended consequence of the amendment,” Nevada Labor Commissioner Michael Tanchek said during an informational workshop, “and I think it’s a very bad thing. This really bothers me.” Tanchek was bothered because he believed at the time that organizations like Opportunity Village would have to comply with the new wage law, costing the highly visible organization $1.7 million per year. Opportunity Village employs the intellectually disabled to do simple assembly and packaging work and pays their clients on a piece-work basis. For example, casino giant Harrah’s has contracted with the organization to package sweeteners and non-dairy creamer packets in plastic wrappers to be used in its hotels nationwide. It was crystal clear to everyone that the mentally challenged adults at Opportunity Village could not produce at a rate to justify the new wage requirement that the voters in their collective wisdom foisted upon employers on Election Day. Also clear, was the fact that these jobs provide a great benefit to the clients of Opportunity Village. It wasn’t just the money. These jobs provide a vehicle for these disabled adults to learn self-reliance and self-esteem. They feel the same joy of providing a job well done each day as any of us do. And you would think that if there were ever a dead-end job, Opportunity Village is it. Wrong: “Many go from the training center to jobs in the community that pay more than minimum,” reports the Las Vegas Review-Journal. The organization’s executive director, Ed Guthrie, boiled down the problem of minimum wage laws while discussing the new wage amendment with R-J columnist Erin Neff: “And that straight-forward reading could mean we have to pay $6.25 an hour whether they do 20 pieces or 100 pieces.” That is the problem with the minimum wage. Inexperienced and under-skilled workers who can only do 20 pieces an hour (to use Guthrie’s example) would have to be let go by an organization that must earn a profit to stay in existence and keep people employed. And tragically, those under-skilled workers never then get the opportunity to learn and improve those skills to take the next step on the employment ladder. Unfortunately, what is plain-as-day when we speak of mentally challenged adults who work for a non-profit, doesn’t seem to penetrate the brains and hearts of politicians (and voters) who seek minimum wage increases when average workers and businesses are considered. People voting for the minimum wage indulge a fantasy that they are helping the hard-working down-on-his-luck adult minimum-wage earner who is struggling to support a family. Instead they are preventing the sweet, earnest but maybe-a-little slow kid living down the block from getting that first job, because his output does not reach the economic level required by a wage that government has set too high.
But alas for the average entry-level worker seeking that first job. There will be fewer opportunities to go around after the politicians in Washington get done this year. January 10, 2007 Doug French [send him mail] is executive vice president of a Nevada bank and associate editor for Liberty Watch Magazine. He received the Murray N. Rothbard Award from the Center for Libertarian Studies. Copyright © 2007 LewRockwell.com |
There
is a happy ending for the clients of Opportunity Village, as it
has been ruled that minimum wage laws do not apply to them. The
organization had obtained an IRS classification that considers its
workers “independent contractors.”