Opportunity
Village and fewer opportunities
Indulging in fantasy this November,
voters became destructive
By Doug French
Nevada Policy
Research Institute
With majorities
in the house and senate, Democrats are virtually certain to
raise the minimum wage in early 2007.
They have been attempting the
increase for years, but Republicans have stood in the way. No
longer.
The head Republican, President
George W. Bush, announced at a news conference: “I support the
proposed $2.10 increase in minimum wage in a two-year period.”
The President went on to say
that he wants to pair the increase with “targeted tax and
regulatory relief to help small businesses stay competitive,”
proving that he doesn’t understand who is really hurt most by
a minimum wage boost.
Businesspeople aren’t
successful if they can’t overcome the obstacles that
government continually puts in their path or the pressure
applied by competitors. Thus, a government mandate to increase
the wage floor will put few business people, if any, out of
business. Entrepreneurs will figure out a way to keep labor
costs in line as they always have, using creative scheduling,
mechanization and technology, etc.
But the reaction to Nevada
voters choosing to increase the Silver State’s minimum wage a
dollar over the Federal minimum should give the President a
clue.
The most ardent fans of a
minimum wage increase were horrified that the new law would
affect non-profit organizations.
“This is an unintended
consequence of the amendment,” Nevada Labor Commissioner
Michael Tanchek said during an informational workshop, “and I
think it’s a very bad thing. This really bothers me.”
Tanchek was bothered because he
believed at the time that organizations like Opportunity
Village would have to comply with the new wage law, costing
the highly visible organization $1.7 million per year.
Opportunity Village employs the intellectually disabled to do
simple assembly and packaging work and pays their clients on a
piece-work basis. For example, casino giant Harrah’s has
contracted with the organization to package sweeteners and
non-dairy creamer packets in plastic wrappers to be used in
its hotels nationwide.
It was crystal clear to
everyone that the mentally challenged adults at Opportunity
Village could not produce at a rate to justify the new wage
requirement that the voters in their collective wisdom foisted
upon employers on Election Day. Also clear, was the fact that
these jobs provide a great benefit to the clients of
Opportunity Village. It wasn’t just the money. These jobs
provide a vehicle for these disabled adults to learn
self-reliance and self-esteem. They feel the same joy of
providing a job well done each day as any of us do.
And you would think that if
there were ever a dead-end job, Opportunity Village is it.
Wrong: “Many go from the training center to jobs in the
community that pay more than minimum,” reports the Las Vegas
Review-Journal.
The organization’s executive
director, Ed Guthrie, boiled down the problem of minimum wage
laws while discussing the new wage amendment with R-J
columnist Erin Neff: “And that straight-forward reading could
mean we have to pay $6.25 an hour whether they do 20 pieces or
100 pieces.”
That is the problem with the
minimum wage. Inexperienced and under-skilled workers who can
only do 20 pieces an hour (to use Guthrie’s example) would
have to be let go by an organization that must earn a profit
to stay in existence and keep people employed. And tragically,
those under-skilled workers never then get the opportunity to
learn and improve those skills to take the next step on the
employment ladder.
Unfortunately, what is
plain-as-day when we speak of mentally challenged adults who
work for a non-profit, doesn’t seem to penetrate the brains
and hearts of politicians (and voters) who seek minimum wage
increases when average workers and businesses are considered.
People voting for the minimum
wage indulge a fantasy that they are helping the hard-working
down-on-his-luck adult minimum-wage earner who is struggling
to support a family. Instead they are preventing the sweet,
earnest but maybe-a-little slow kid living down the block from
getting that first job, because his output does not reach the
economic level required by a wage that government has set too
high.
There is a happy ending for the
clients of Opportunity Village, as it has been ruled that
minimum wage laws do not apply to them. The organization had
obtained an IRS classification that considers its workers
“independent contractors.”
But alas for the average
entry-level worker seeking that first job.
There will be fewer
opportunities to go around after the politicians in Washington
get done this year.
<740 words>
Doug French is
executive vice president of a Southern Nevada bank and a
policy fellow of the Nevada Policy Research Institute.
