Politics seldom dictates markets

Print Article

Higher pay is a good thing, but government mandates can backfire.

AWHILE BACK THERE was an editorial cartoon that showed the outline of the financially-troubled State of Illinois. Frantically fleeing in all directions were vehicles towing U-Hauls.

So now the new governor, Democrat J.B. Pritzker, is pressing the overwhelmingly Democrat legislature to make good on a campaign promise to raise the minimum wage to $15 an hour.

The current Illinois minimum wage is $8.25, already higher than a number of states. The Pritzker plan would boost the minimum to $9.25 next January, then to $10 in July 2020, with another dollar increase each January until 2025. Advocates say the higher minimum would grow the Illinois economy $19 billion a year and pump nearly $400 million more a year into the state's tax coffers.

THAT'S ASSUMING, of course, businesses in Illinois eagerly will write the checks to employees and gladly deposit more tax money with the state's treasury.

And the cow will jump over the moon.

More likely, business operators would pull out their calculators and crunch numbers to decide just how much more they were able and willing to pay. Then, they would keep as many workers as that number would allow and let the rest go.

And, when factoring expenses, they'll keep this in mind: Raising the bottom of the pay scale doesn't stop there. Every higher-paid employee would expect similar percentage bumps as the minimum rises.

As for the state pocketing more tax money, remember that cartoon. Businesses that can get out have been getting out already. Several have come to Beloit - and we're more than glad to accommodate more.

LOOK, WE'RE ALL for people making more money. But markets, not politicians, determine how much businesses are going to pay their employees. Private enterprises will pay what they think they need and can afford, and not a penny more. If that means eliminating some jobs, that's exactly what they'll do.

Beware the law of unintended consequences.

Print Article

Read More Editorials

To the board: Why the rush?

April 15, 2019 at 10:19 am | Except in emergencies, lame-duck public bodies should defer decisions following elections. THE PAST WEEK was tumultuous for the School District of Beloit. On Tuesday, April 9, the board of educa...

Comments

Read More

Still polarized, down the middle

April 15, 2019 at 10:19 am | With half leaning one way, half the other, shouldn't Wisconsin learn to collaborate? SO WHAT CAN Wisconsin learn from the razor-thin race for state Supreme Court between appellate court judges Bri...

Comments

Read More

'Physician Citizen' for a half century

April 08, 2019 at 10:08 am | This is a break from custom. Normally, though I write the opinion pieces that appear in this space, which I suspect most readers know, I do not sign the editorials. Today, though, requires a persona...

Comments

Read More

Endorsements

April 01, 2019 at 9:48 am | The Beloit Daily News has made the following endorsements for Tuesday's election: • For Wisconsin Supreme Court: Judge Lisa Neubauer • For Beloit Board of Education: Pam Charles, John Won...

Comments

Read More

Contact Us

(608) 365-8811
149 State Street
Beloit, WI 53511

©2019 Beloit Daily News Terms of Use Privacy Policy
X