Need employees? Pay a living wage

How increasing the minimum wage would actually increase employment

Photo by 金 运 on Unsplash

When I was practicing law, clients would often tell me “I couldn’t sell my house.” To that statement, I had a stock response: “Yes you could sell your house. You can always sell your house. The question is whether you can sell it for the price you want.”

The recent whining we are hearing from the business community reminds me of that statement. To their whine that they can’t hire enough employees to operate, the immediate rejoinder should be “at the price you’re willing to pay.” Because the reality is that many businesses are not willing to pay people enough money.

The alleged culprit is the higher unemployment benefits granted laid off workers as part of the Covid relief laws. According to recent analysis, as much as forty percent of workers earn more money from unemployment than they do from working.

The response from conservatives and much of the business community has been predictable: end the higher unemployment benefits. If we do that, people will be forced to go back to work. Indeed, even though it costs the state nothing to provide the expanded unemployment benefits since the federal government is footing the bill, at least two states have taken it upon themselves to unilaterally end expanded unemployment benefits for their residents.

Not terribly surprisingly, these states are run by Republicans. What is shocking, but unfortunately also unsurprising, is that many of the people who have been hurt by this change will vote those same Republicans back into office.

The response of many Democrats, including President Biden, has been to take a defensive posture, to claim that remaining unemployed in this crisis can be due to a number of factors, including lack of childcare and fear over the safety of their family. And indeed, research has generally supported the argument that few people forgo jobs to remain on unemployment, no matter how generous the benefits.

I for one, however, will not blanch at the reality. As a liberal, former small business owner, and student of economics, I believe there is a significant group of the unemployed who are not actively seeking work because they earn more in…