Arizona voters passed an initiative to increase the minimum wage which currently stands at $11 an hour and is on its way to $12 in 2019. During a trip to a renovated fast food restaurant for coffee, I found a dramatically reduced counter with no employee but a very large touch screen to take my order. While modernization and technological advancements are certainly a welcomed part of the 21st century, their implementation in small businesses is no doubt spurred by the ever-increasing impact that mandates on employers are having on job creation. Although the restaurant claims the renovations are meant to improve customer experience and to assist employees, not replace them, it’s easy to see that the future belongs to electronic machines that won’t encourage government mandates that make doing business costlier and more difficult.
The beauty of electronics is that large touchscreen tablets don’t require $11 an hour to show up to work and are more than capable of taking coffee or burger orders. What supporters of increasing the minimum wage rate have failed to acknowledge is that forcing an increase in labor costs on employers is only eliminating jobs, not helping hard-working Americans. Unfortunately for those seeking entry-level positions, like many teenagers, the recent national push to increase the minimum wage to $15 is causing more problems than it is solving. The issue lies in the fact that political activism has superseded the reality of what a minimum wage actually is.
Minimum wage positions were never intended to allow a breadwinner to feed an entire family. Nor was it created to be a wage so high that it would sustain a prosperous lifestyle. When supporters of $15 an hour minimum wage point out that current rates do not allow workers enough money to live on, they are correct. That’s because that was never the purpose of a minimum wage.
Minimum wage jobs are important and as the rate becomes outrageously unsustainable for small business owners, they are becoming extinct. And that’s because no teenager is worth $15 an hour to an employer. They have no skills, no qualifications, and no previous experience. Working entry-level jobs is vital to workforce development. They teach young people how to show up on time, speak to the public, dress appropriately and learn new skills with on the job training. The unemployment rate amongst teenagers in high minimum wage areas is sky high which means our future workforce is woefully unprepared.
The problem with mandates including the one to increase the minimum wage rate is that they work from the premise that employees are disenfranchised by their overbearing employers and they require saving. That could not be further from the truth. I know firsthand just how valuable employees are to their businesses. As a matter of fact, the Tax Cuts and Jobs Act has been a prime example of how when employers have more money freed up they will, without being mandated to do so, raise hourly rates, provide bonuses and increase available hours for their employees.
The answer to improving the job climate is to continue to reduce regulations and free up more of the revenue that job creators are capable of producing. Failure to create policies that encourage future job growth and economic success will only result in a drastic increase in robot production. Make no mistake about it, I don’t support mandates to increase the minimum wage at any level and I stood strong in opposition to Proposition 206. But unfortunately, continued minimum wage increases are now inevitable in Arizona. The only hope to sustain entry-level jobs in our state is for our policymakers to at least have the good sense to carve out a lower rate for teenagers before their job opportunities dry up completely.
Carlos Ruiz is the owner of HT Metals and a member of the Job Creators Network