The Spectacle Blog

ThinkProgress Tries to Figure Out This Whole Minimum Wage Thing

By on 6.27.14 | 1:35PM

ThinkProgress would like you to know that Ikea will be raising its average minimum wage to $10.76 an hour for its American employees. The company has said it will calculate base pay by considering the cost of living at each of its store locations. In other words, Ikea’s goal is to provide a living wage. ThinkProgress helpfully points out that other companies have also raised their minimum pay recently, and that “these companies usually cite the same reason: they expect it to help them attract and retain better employees, which will help their bottom lines.”

No way. I just cannot believe that there could be a market reason to pay your employees enough for them to live well. Neither can ThinkProgress. Clearly competition has nothing to do with the decision. Clearly this is driven by politics. ThinkProgress commented, “The companies’ wage adjustments come while legislative action to raise all workers’ minimum wages has stalled.” Hmm…those darn Republicans, stopping everyone from earning a $10.10 minimum wage. It sure is nice of Ikea and The Gap and—wait, really, Hobby Lobby pays $13 an hour?

But in all seriousness, how can anyone, even the bloggers at ThinkProgress, with their craniums so far up their rectums that they can’t see the forest for the gastric juices, be surprised that large, competitive businesses would raise their minimum wages even when there was no legislative mandate? Here’s another piece about the benefits of competitive wages and benefits for businesses, to which I say, “of course.” The assumption appears to be that if higher wages are good for business, then everyone raising their wages will be great for the economy.

Applications go up when pay goes up, sure. But that doesn’t mean more jobs. Competitive pay leads to competitive hiring. Ikea was clearly in a financial position to offer the kind of money that would attract the kind of employees it wants. It was not motivated by a desire to take action when Congress won’t. It was looking after its own interests, which, in a free market where profits depend on other people, meant it was looking after its employees' interests. Mandated minimums don’t guarantee everyone earns that wage; just the ones who are hired.

Of course, not all businesses are against raising the federal or even state minimum wages. There’s a competitive reason for that. Businesses large enough to offer these kinds of competitive base pays on their own, like Ikea, profit by the protectionism created when legally mandated minimum wages drive smaller competitors' costs up, preventing further hiring and growth. Raising the minimum wage is bad for business, but a business raising its minimum wage, when it decides to, adds fuel to the competitive fire of the free market. ThinkProgress needs to stop progressing and think.

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