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A Case Study in the Minimum Wage
Matt Singer on January 11, 2007 - 9:48am
The New York Times looks at the neighboring towns of Lewiston, ID and Clarkston, WA. The neighboring cities lie just opposite eachother, separated by the state border. They're also separated by an economic border -- Idaho's minimum wage is $5.15. Washington's is $7.93. When Washington embraced its higher minimum wage, some business owners cried bloody murder. But they're singing a different tune now:
During a recession five years ago, the same group had argued that Washington’s high minimum wage law would send businesses fleeing to Idaho. The group sent out a news release with a criticism of the law from John Fazzari, who owns a family-run pizza business in Clarkston, Wash., just minutes from the Idaho town of Lewiston. But now Mr. Fazzari says business has never been better, and he has no desire to move to Idaho. "To tell you the truth, my business is fantastic," he said in an interview. "I’ve never done as much business in my life."That business group -- the Association of Washington Business -- has stopped fighting minimum wage hikes and calls increasing the federal minimum "almost a no-brainer." The business owners in Washington admit that prices have gone up a bit, but they also note lower turnover -- a move that actually saves money for businesses. Almost humorously, the article ends with a comparison of "research" put forth by competing views. The basis for the argument against raising the minimum wage? A survey of what business owners believe will happen with a wage hike. The basis for the argument for raising the minimum wage? A study by a Washington State University economist who found that the minimum wage hike benefitted 97% of low-wage workers.