There is a near-universal consensus among economists that increases in the minimum wage harm low-skilled workers the most. Originally designed to mimic racially discriminatory laws elsewhere, the minimum wage continues to be a means of picking certain classes and geographic locations over others. For example, the minimum wage benefits the high-cost-of-living areas in the Northeast over the lower-cost-of-living areas in the South.
It also benefits the more educated over the less educated, and as I have noted before in the Jefferson Journal, increases in the minimum wage benefit the healthy over the handicapped.
Governor Glenn Youngkin’s understanding of the dangers of government intervention in wages is best summarized in the Governor’s defense of his veto of HB1 and SB1 — which would have raised the minimum wage to $15 per hour. In his veto explanation, the Governor notes, “The free market for salaries and wages works. It operates dynamically, responding to the nuances of varying economic conditions and regional differences. This wage mandate imperils market freedom and economic competitiveness.”
Acknowledging the regional differences in impact, the Governor noted,
Implementing a $15-per-hour wage mandate may not impact Northern Virginia, where economic conditions create a higher cost of living, but this approach is detrimental for small businesses across the rest of Virginia, especially in Southwest and Southside. A one-size-fits-all mandate ignores the vast economic and geographic differences and undermines the ability to adapt to regional cost-of-living differences and market dynamics. Continue reading