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EDITORIAL: The fraud of a ‘living wage’

Montgomery County could learn something from Mayor Gray

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Hauling trash is a dirty job, and the men and women who haul the refuse, like the rest of us, deserve all they can get their employers to pay them. What none of us deserve is a government edict to tell employers how much to pay. But it's tempting for the politicians to do that, since it's not their money.

Fifty-seven employees of Potomac Disposal of Gaithersburg, Md., who recently affiliated with the Laborers' International Union of North America, walked away from their trucks when the company attached to their time cards a request for confirmation of immigration status. They said this was "intimidation." They used the occasion to demand raises, too.

Montgomery County pays Potomac Disposal $5 million a year to retrieve trash and recyclables from 40,000 houses in Bethesda, Rockville, Potomac and Silver Spring. The company is supposed to pay its employees at least $13.95 an hour because the county requires all its contractors to pay a "living wage." A hauler emptying a garbage can in Olney, for example, must be paid 92 percent more than other entry-level jobholders who are paid the federal minimum wage of $7.25.

This sounds fair, just and compassionate to many people, particularly in the prosperous liberal precincts of Montgomery County, but imposing a government-decreed minimum wage is a job killer, and it burdens small businesses with demands they can't meet. Compassion, however heartfelt, cannot trump economics.

Mayor Vincent Gray of Washington knows this, which is why he reluctantly vetoed legislation in the City Council to raise the minimum wage from $8.25 an hour to $12.50 an hour for employees of big-box retailers with 75,000 square feet of selling space and annual corporate sales of $1 billion. "If I were to sign this bill into law," he said, "it would do nothing but hinder our ability to create jobs, drive away retailers and set us back on the path to prosperity for all."

Living wage laws are built on the fanciful premise that money magically appears, like manna from heaven, to pay employees at a rate that politicians think just. They're oblivious to the hidden costs of their mandate. Raising the minimum wage to unreasonable levels devastates the prospects of teenagers and others trying to find a way to break into a tough job market. Employers who might in a free market hire two new employees at entry-level wages usually settle for hiring one person at such wages to do the jobs of two. It's a recipe for youth unemployment.

The "living wage" law enacted by the District of Columbia was intended to punish Wal-Mart, a familiar target of leftist scorn, which wants to build six stores in the District but threatened not to if it was to be punished by the living wage scheme. "The majesty of the law resides in its generality," the Economist magazine observes. "Rules intended to pick out particular individuals or firms are just thuggish." And so, too, are laws that make politicians feel good at the expense of employers who can't pay a government-dictated wage and the prospective worker eager for an entry-level job.

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