“It’s not enough; it’s never going to be enough. We’re never going to get there through minimum wage policy to get people up to the standard of living we aspire to. You’re never going to have that outcome for low-skill labor.”
West Virginian economists and business leaders weigh in on increasing the minimum wage
October 26, 2024
Charleston, W.Va. – Minimum wage policy is one of the most fundamental questions of economics, but there is no easy answer.
Although West Virginia’s instituted minimum wage is $8.75 an hour, due to inflation many low-skill jobs in West Virginia are starting employees at $12 an hour or more.
“The minimum wage in West Virginia isn’t really effective anymore,” said West Virginia University economics expert John Deskins.
Because inflation in recent years has been so high, the market wage being paid for unskilled labor has increased drastically without an increase to the mandated minimum.
West Virginia’s minimum wage has not been adjusted since 2008. But since then, inflation in the economy has risen 46%.
If West Virginia’s minimum wage had been adjusted for inflation, it would be approximately $12.77 in 2024. But, Deskins believes raising the statutory minimum wage is unlikely to have much of a positive effect for the majority of unskilled workers.
“There may be a few (employers) bringing on extremely unskilled laborers like high school students for the set minimum wage, but it’s a very small number,” Deskins said.
While those high school employees would make more under a higher mandated minimum wage, the price of many goods also would likely increase.
Still, for those working full time in low-skill jobs, even the market-offered minimum wage of $12/hour is not always enough to live on.
This is why the West Virginia Democratic Party’s position on the matter is to raise the minimum wage, said Party Chair Del. Mike Pushkin, D-Kanawha.
“Hardworking West Virginians deserve a fair wage that reflects the true cost of living,” he said.
“The current minimum wage hasn’t kept up with rising prices, leaving too many families struggling to make ends meet.
“While some argue that the market should dictate wages, the reality is that market forces alone have failed to ensure that workers earn a livable wage.”
It’s the Democrats’ contention that the state’s minimum wage should support all full-time workers to afford housing, food and health care, regardless of their level of skill.
The Democratic Party chair also said raising the minimum wage is a smart fiscal policy that would strengthen the local economy.
“It’s no coincidence that West Virginia has the third-lowest minimum wage in the nation and the fifth-highest poverty rate,” he said.
“When workers earn so little, they struggle to lift themselves and their families out of poverty. Moreover, workers earning minimum wage put almost all their money back into the local economy by purchasing necessities like groceries, gas, and housing.”
While the West Virginia Republican Party does not have an official stance on the matter, the party’s platform “has always been” to let the market decide, said WVGOP Chairman Matt Herridge.
“The market sets the true minimum wage, and we need to allow that to happen,” he said.
Herridge argued that raising the minimum wage has the potential to create inflationary pressures that can cause increased wages to not equal any real benefit.
As a restaurant owner, Herridge said when wages raise, so do prices. Even still, food service businesses often offer $4 to $5 above the minimum wage just to stay competitive.
Downward pressure on the retail and fast food sectors may also increase the speed at which those industries continue to automate their processes in order to save costs, resulting in fewer low-skill employment opportunities, Deskins said.
Many McDonald’s locations have already implemented touchscreen kiosks to take orders while keeping only one human cashier on shift at a time. Grocery stores like Walmart have also implemented automated registers that many shoppers use as opposed to being checked out the traditional way.
The WVGOP chairman also argued that minimum wage jobs are not meant to fully support one’s needs.
“When I first started working at 16 years old, I didn’t expect to be making enough money to buy a house and support a family. I was trading my time to learn how to work, and building skill sets. They are entry level, they are low skill, but they are a step in the process for everyone to improve,” Herridge said.
West Virginia Chamber of Commerce President Steve Roberts also said raising the minimum wage is not something the chamber is pushing for.
“This is not an issue for us. Members of the West Virginia Chamber of Commerce employ over half of West Virginia’s workforce and what they tell us is that they are paying in excess of the minimum wage and their issue is the much larger issue of finding enough employees,” he said.
Instead of increasing the minimum wage, Deskins argued that increasing the number of educational opportunities is how to best provide greater economic outcomes for all.
“One way to increase the average standard of living in West Virginia is to cultivate more education and training opportunities which would increase their human capital and make them more qualified for skilled work,” he said.
In his support for creating more opportunities for workers to increase their human capital, Deskins reiterated points made by both Pushkin and Herridge that minimum wage, whether mandated or effective, is generally not enough.
Story by Damian Phillips, WV News