Lawmakers need to tweak state's law on minimum wage

Feb 16 2003 12:00AM

By the Editorial Board of the Union-Bulletin

Washington state's minimum wage, which increases every year as required by a voter-approved initiative, no longer seems a minimum wage. And compared to 48 other states, it isn't. The state's minimum wage is $7.01 an hour, second only to Alaska.

During boom times, which is when voters approved the initiative, a high minimum wage isn't a problem. But when the bubble bursts, as it has in the Pacific Northwest, artificially inflated wages create further economic problems.

Recently the Legislature pondered tinkering with the minimum-wage law as one way to get Washington's economy back on solid ground.

Economist Richard Vedder, a professor at Ohio University, told lawmakers at a committee hearing that an increase of the minimum wage reduces the number of jobs available, particularly for entry-level positions.

``A fairly strong case can be made that the higher minimum wage actually created a new poverty,'' Vedder said. ``You actually reduce prosperity for your citizens when you try to outguess markets.''

Agreed.

Washington voters didn't do themselves a favor in approving an annual minimum-wage hike. Not only are jobs lost, but the costs of goods and services are sure to go up so employers can pay employees. And when businesses simply can't charge any more for their product or service, they are forced to close the doors.

But we also believe there is a need for a reasonable minimum wage to ensure that the most vulnerable in society are not treated unfairly by unscrupulous employers.

The Legislature must proceed carefully. Earlier this year we suggested lawmakers consider linking minimum-wage increases to the state's economic health so that during tough times the wage would not increase as much, or at all. Or lawmakers could cap the minimum wage for a few years until it comes into line with the economic conditions.

Sen. Mike Hewitt, a Walla Walla Republican who sits on the Senate Commerce and Trade Committee, is seeking that type of compromise.

Hewitt said he is interested in linking the minimum wage to the state employment rate. When employment drops below a certain level then the minimum wage would be frozen.

Indexing the minimum wage makes far more sense than the initiative that simply boosts it year after year without regard to economic conditions.

Nevertheless, the indexing plan is going to be a tough sell in the Legislature. Lawmakers generally treat the handiwork of voters as sacrosanct.

But the sour economy of the Northwest is reason enough for legislators to muster the courage to change the minimum-wage law. It's bad public policy for the state to mandate wage hikes in the midst of a recession.