Different Kansas, Missouri pay rates show how minimum wage laws hurt the working poor | Opinion

As an undergraduate, I worked full-time at a hospital in downtown Boston. Once, my supervisor needed to fill a few shifts and so I volunteered – and was told no. If I took the extra hours, the hospital would have had to pay me time and a half — something not in the budget. Well-intended labor regulations kept me from earning more.

The unintended consequences of government policy have been my focus ever since.

Those first jobs in Boston were a great classroom. I learned how to take orders and to be managed. I learned how to deal with anxious patients and difficult surgeons. My time spent working in the emergency ward and on patient floors taught me to navigate stressful situations. Most significant — and I cannot stress this enough to my daughters — I learned the importance of showing up for work on time.

These memories resurfaced while reading the book “Full-Time: Work and the Meaning of Life” by David Bahnsen. Bahnsen extols not only the importance of work for the role it plays in the larger economy, but the role it plays in giving each of us purpose. He writes: “With purpose, the need is not to receive honor or respect, but to be honorable and respectable. It addresses the issues not only of our time, but also of our character, by requiring service and sacrifice.”

Bahnsen also points out that the labor participation rate for 16- to 24-year-olds dropped from 65% in 2000 to 55% in 2010 and — despite a spike downward during the pandemic — hangs just above that level today. He argues that young people are missing out on “life skills, experiences, resilience, rejection, success, development of mutual cooperation instinct, the basic practice of showing up, having responsibilities and expectations” — exactly the things I learned from my first jobs.

All of this brings me to the tragedy of the minimum wage. It is another well-intended policy meant to boost worker pay. But just like my experience trying to pick up extra hours at the hospital, it is a policy that harms the working poor.

Labor is often the highest cost of any organization. When the cost of something increases, we buy less of it — as true for labor as it is with groceries, housing and recreational activities. The result of higher wages: Employers hire fewer people, give workers fewer hours, invest more in technology — such as automated check-out lanes or touchscreen ordering kiosks — or a combination of all three.

The minimum wage means that while some may be paid more, fewer will have jobs. The effect is that the real minimum wage — if you consider the jobs lost — is $0.

The heartbreak is that young people at the bottom of the socioeconomic ladder have fewer opportunities today to get that first job and learn those important things I did and that Bahnsen praises. Unfortunately for poor kids in Kansas City, that’s just the beginning of their problems.

Missouri’s minimum wage is $12.30 per hour. In Kansas it is $7.25. Does that mean kids in Kansas are earning less? No, because workers can easily cross the border to work in Missouri, Kansas employers must pay more to compete. And because that border is porous, Missouri employers may be more likely to employ kids from Kansas who have access to their own transportation — meaning fewer opportunities for poorer Missourians.

The result: A policy meant to help the working poor does no such thing. By reducing available jobs and increasing competition for them, it actually makes them worse off.

Even Christina Romer, who led President Barack Obama’s Council of Economic Advisers, conceded there were questions about “whether a higher minimum wage will achieve better outcomes for the economy and reduce poverty.”

Minimum wage laws reduce the number of jobs available and therefore rob younger workers of the very skills they need to be productive and purposeful. If we want to help the working poor, we need to create jobs at all income levels and incentivize workers to develop skills and climb the socioeconomic ladder. Government intervention, despite good intentions, often results in the opposite outcome.

Patrick Tuohey is co-founder of Better Cities Project, a 501(c)(3) nonprofit focused on municipal policy solutions, and a senior fellow at the Show-Me Institute, a 501(c)(3) nonprofit dedicated to Missouri state policy work.