In Our View: Raise Skills, not Base Pay

As the state Legislature ponders once again one of the hot potatoes of American politics — the minimum wage — a simple truth of economics bears repeating: If you would like to increase your earning power, improve your skills.

This is particularly sound advice for those who make minimum wage. While marching in the streets or shouting from the rooftops that you deserve $15 an hour or some other arbitrary level of payment might attract attention, the more effective method for increasing wages is to develop some skills. Be it through education or experience or natural talent, having the kind of ability that employers are looking for — and are willing to pay for — will result in a better life for you and your family.

We can empathize with those who earn minimum wage. In Washington, that is set at $9.47 an hour this year — a number dictated by Initiative 688, which was passed by voters in 1998 and established an annual cost-of-living increase for minimum pay. It can be difficult to make ends meet on that kind of salary, although the living-wage calculator from the Massachusetts Institute of Technology suggests that, as of March 2014, the living wage for a single adult in Clark County is $8.62 an hour. To be fair, that calculation assumes full-time employment, which often is not the case for those making minimum wage.

In addition, we can empathize even with those who are making slightly more than the minimum. As a study by the Harvard Business School determined last year, the typical CEO in the United States makes 350 times as much as the average worker. And in September of last year, The Washington Post wrote, “An analysis from last year estimated that it takes the typical worker at both McDonald’s and Starbucks more than six months to earn what each company’s CEO makes in a single hour.”

Income inequality is a valid concern in this country, and many see an increase to the minimum wage as one method for addressing it. Lawmakers in Olympia are considering a bill that would increase the state’s minimum wage to $12 an hour over the next four years, calling for a 50-cent increase each Jan. 1.

Any discussion of the minimum wage is certain to unleash strident opinions on both sides. The city of SeaTac last year implemented a minimum of $15 an hour for some service workers. Seattle followed suit by approving a gradual increase to bring that city’s minimum to the same level over the next four years. In September, columnist Dana Milbank of The Washington Post wrote, “SeaTac did it all at once. And, though there’s nothing definitive, this much is clear: The sky did not fall.” Milbank also quoted labor official David Rolf as saying, “SeaTac is proving trickle-down economics wrong, because when workers prosper, so do communities and businesses.”

Yet there is a fine line between helping workers prosper and helping the businesses that employ them to prosper. The two ideas are not mutually exclusive, but they require some balance. As The Columbian has written editorially, “If forced, through legislation rather than market forces, to increase pay for unskilled workers, business owners are going to reduce their number of unskilled workers. They won’t reduce pay for their valuable employees; they won’t reduce profits; they won’t cut other expenses. No, they’ll eliminate the positions that are the most expendable.”

Which brings us back to our original premise: If workers wish to increase their pay, they should improve their skills.