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  • Commerce & Regulation

    Opinion

    Gubernatorial candidate Mark Schauer proposed on Nov. 18, 2013, his intentions to raise Michigan's minimum wage from $7.40 to $9.25 if elected. Charles E. Ramirez, a writer for The Detroit News, told this story in an article titled "Schauer proposes hiking state minimum wage to $9.25 an hour." This initiative would take place over a three year period—hourly pay rates would raise (from the current $7.40) to $8 the first year, $8.60 the year after and $9.25 the third. Also proposed by Schauer is a yearly adjusting of the minimum wage's amount to account for inflation variances. Schauer is a former congressman and previously worked for the Mighigan Laborers' union; these ties somewhat elucidate his ambitious roots. This article centralizes around Schauer's arguments that promote his proposal and countering thoughts that bring to question its effectiveness. Demonstrated is an appeal that gains effectiveness by targeting the audience's goals, rather than proving statistically that said proposal is plausible and exemplifies an advocates emotional appeal to audiences without statistical backing.

    Schauer first argues that economic growth is facilitated by increasing low-income consumer assets and consequentially inciting businesses' profits through heightened spending by this group. The former congressman stated, "I believe minimum wage earners deserve a raise…Having more money in your pocket creates demand, which helps businesses, which, by the way, hire Michigan people to work." Basic economics vaguely support this assumption, being that consumers cannot spend money they don't yet have, however a lack of quantitative data to support this premise prompts concern. In response to Schauer, the chamber's director of health policy and human resources Wendy Block explains, "Although the intent of an increase is to help low-income workers, studies show that it can have the opposite effect by driving up the cost of entry-level jobs, encouraging employers to hire higher-skilled job applicants, and generally increasing the cost of doing business in the state." When considering the latter statement, Schauer's previous implications toward a positive cyclical response aroused by pay bumps seems to be more of an unwarranted generalization chauffeured by an idealist's causal inferences.

    Schauer next attempts to emotionally sway his audience by enlisting the aid of morals. He anticipates his plan positively affecting 1 million workers and supporter Dale Belman, a Michigan State University labor economist, acknowledges this change having little or no negative effect on Michigan unemployment. Fast-food worker and supporter Sam Johnson stated, “I make $8.25 an hour…No matter how hard the people of Michigan work, with the minimum wage where it is, this American dream that everyone aspires to has been obliterated by this economy.” Similar comments suggest that people are simply unable to afford living in the areas that they once could and current times stifle success in ways that seem unfair. This side's emotional appeal is contradicted again by a similar argument from Block, stating, "Even if jobs are not cut (out of necessity due to salary increases), employers respond to higher labor costs by shifting their hiring focus to better skilled employees or more capital-intensive production, leaving the least skilled out of the labor market." It's true that labor markets have changed and techniques that once prompted success are now deemed below-average, as alluded to by supporters of this reform, however Block brings a prudent point to attention. With the Millennial generation now entering the marketplace at an ever-increasing rate, labor for all hierarchal levels will never be less competitive or demand less refined skill-sets. Post-secondary educations are more prominent than ever, and if jobs featuring minimum wage become more worthwhile than before, it seems foolish to expect anything other than a shift toward demands for higher qualified—readily available—employees.

    Also, when Schauer mentions reaching 1 million workers he fails to give any indication of the force with which he'll do so. According to the United States Department of Labor's Bureau of Labor Statistics (2012), Michigan's lowest recorded hourly wage, by mean, is $8.71 for dishwashers. This category, along with five others, are the only members under the hourly mean mark of $9.25 and have a gross population measuring only an approximate third of employees involved in food preparation and service related occupations. In other words, the measurement which Schauer presents (of 1 million workers) seems to be polluted by generalizations. The notion that his minimum wage proposal would benefit the lives of so many is too easily falsifiable without taking into consideration the true population we are working with—that is those from all categories who rest under this $9.25 floor, regardless of mean values that are above or under it—as well as the turnover rate of jobs held by people less qualified than those who now seek them, and the probability of someone who lacks a job and possibly any form of skill being hired into a position that now pays a heightened amount.
    Despite Schauer's good intentions and qualitative arguments, statistics bring to perspective some noteworthy risks. The author is careful to mention, "If the $9.25 rate were adopted, it would top Washington state's nation-leading $9.19 an hour, according to the National Conference of State Legislatures. Michigan's $7.40 an hour ranks in the top 20 among the states, according to the conference, and bests the federal wage floor of $7.25." These figures bring to question whether such a dramatic increase for Michigan would be necessary, considering that over half of the states are below the $7.40 mark and still performing better economically. There's no certainty that drastic changes would fail to give Michigan's economy a boost, but knowledge that no other state rivals this new amount reconfigures one's perspective and accentuates this idealist's underlying measures.

    The $9.25 figure is worrisomely far from the federal wage floor, being a nearly 28 percent increase from the floor and a 25 percent increase from the current state minimum wage. This translates to Michigan's—already struggling—small business owners only being able to pay four minimum wage workers with the amount that they once could once pay five with. The aforementioned thoughts surrounding Belman in his saying that "raising the minimum wage would benefit the state by increasing workers' incomes with little or no negative effect on employment" is exemplary of unrealistic causation, since there would undoubtedly be an immediate period where the average employer could not financially maintain their previous staffs. It's reasonable to imagine an eventual upswing in businesses' profits given increased consumer assets, but how long would this shift take? Would the businesses ever grow enough to eventually facilitate a staff equal to that which they once had, or even a larger one, given the assumedly sustained minimum wage raises? Could the shift in Michigan's labor cost harm interactions with outside parties, given that it now costs more to employ Michiganders, harvest the state's resources, transport goods within its boundaries, etc.? Will the state's government be placed in conflict when negatively affected businesses seek aid to stay afloat? How did Schauer arrive upon the radical figure of $9.25? All things to be considered when inferring the positive and negative causations related to the topic.
    Schauer's proposal embodies the characteristics of an argument that must be given cautious credibility. He emphasizes portions of broadly ethical arguments and frames them with pathos so that only a truly critical audience would raise question. Meanwhile, Schauer fails to present arguments of measurable worth. Not one point made in favor of this wage reform is associated with a null hypothesis that has been—or is capable of being—falsified or accepted. The counterarguments expressed in this piece represent warranted concerns and guide the skeptical reader to investigate further before investing any amount of agreement; a lack of quantifiable data and a reliance upon sparse testimonials insufficiently battles them. Given the statistics presented here and the data sources from which they originate, the gubernatorial candidate's argument is no more wisely accepted than refuted.

    References
    Ramirez, C. (2013). "Schauer proposes a hiking state minimum wage to $9.25 an hour."
    The Detroit News. Retrieved from: http://www.detroitnews.com/article/20131118/
    POLITICS02/311180074#ixzz2lbDCsJ7a
    United States Department of Labor (2012). "May 2012 State Occupational Employment
    and Wage Estimates Michigan." Bureau of Labor Statistics. Retrieved from:
    http://www.bls.gov/oes/current/oes_mi.htm

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