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Ventura County Perspective

Proposal Is the Wrong Instrument to Fight Poverty

April 15, 2001|DON FACCIANO | Don Facciano is president of the Ventura County Taxpayers Assn

It is not right that people work full-time at minimum-wage jobs and still fall below the federal poverty line. That makes the words "living wage" sound easy to support.

However, there are many questions and concerns.

The living wage proposals being considered by Ventura County and Oxnard would require companies receiving $25,000 or more in government contracts to pay wages of $8 per hour with health benefits or $10 without benefits.

There is a labor neutrality clause to restrict use of public funds by private contractors to influence workers on the question of unionization.

As you can see, the living wage proposal goes much further than just an hourly rate. Our government representatives and the public need to understand all facets.

Wages should be set by the free marketplace, not government. Raising the minimum wage is a very blunt instrument for fighting poverty. Such hikes fail to accomplish their principal policy goal of raising incomes of low-income families.

The living wage campaign is an organized effort to force employers to pay wage rates based on some definition of need rather than skills. Living wage supporters have their hearts in the right place but their compassion could end up hurting the very people they want to help.

If required to pay $10 per hour for jobs once considered entry level, local businesses would attract higher-skilled applicants. This would encourage employers to redefine the nature of the job. A low- or unskilled worker without the new basic qualifications would be among the last employed.

Most minimum-wage earners are not poor. Many live with their parents, work part-time, have a working spouse or are living alone without children. Most people don't get stuck at the minimum wage. They start at the minimum wage then rise above that level quickly.

The most powerful argument against the notion that raising the minimum wage would "pump more money into the economy" is drawn from common sense. If this were true, advocates would push for an increase to $25 per hour, the economy would expand overnight and every business in the county would benefit tremendously. It doesn't take a trained economist to know this does not make sense.

Other questions are:

* How much would this cost? So far nobody has an answer.

* Where would the money come from? If from the general fund, would it come out of the police, fire or library budget? Or from a new tax?

* How much would this increase the county's cost of goods and services?

* Would businesses want the government coming in and inspecting their books? If they do business with more than one government agency could all inspect? Who would administer this and how would this new level of bureaucracy be staffed? How much would that cost?

* Would businesses decide not to contract with government because all of this?

* Would companies decide not to move to our cities and county or would existing businesses relocate because of this?

We need to reduce poverty by targeting the poor with increased child care, transportation, job training, health care and housing assistance. The earned income tax credit, for example, could give a higher benefit than a wage increase.

We need to look at all the questions and have the answers before we act.

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