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Fight for more training, not $15 minimum wage, business group says

As activists and workers push to raise the minimum wage in communities and states across the country, one business organization is advancing a different approach.

The Job Creators Network presents its “Fight for 50” campaign as a more business-friendly alternative to the “Fight for 15” movement that promotes a $15 minimum wage that many small businesses claim they cannot pay. Instead of raising minimum wage salaries, “Fight for 50” focuses on getting low-wage workers the training necessary to apply for jobs that pay $50,000 per year.

Alfredo Ortiz, president and CEO of the Job Creators Network, called the effort to increase the minimum wage “a misguided mandate.”

“We are working on the wrong issue. Instead of fighting to raise the floor, we should be raising the ceilings of these folks that are in these entry-level jobs,” he said.

According to Ortiz, only about 400,000 workers 25 or older are currently making minimum wage, so the portion of society that truly needs the increase is small compared to its potential negative impact on businesses.

“Let’s give them to right skills to get out of these never-ending jobs into careers that actually advance their families and their personal lives to be part of that American dream,” he said.

Minimum wage jobs can serve an important purpose for young workers and teens who need a first job to get into the workforce. If adults are trying to survive on these salaries long term, youth unemployment will stay high and those aging workers will not learn the skills necessary for more lucrative careers.

“These jobs were never intended to feed families of four,” Ortiz said.

He argued the issue is not a wage gap but a skills gap, and the best strategy is to train those older workers so they can take better jobs and more youths can apply for the minimum wage jobs.

“There are many, many employers that would love to put these people to work in the right jobs with the right skills,” he said.

Mike Rowe, the former host of “Dirty Jobs,” is a vocal advocate of vocational training. He testified before the House Education and Workforce Committee this week about the need to overcome that skill and enthusiasm gaps and fill the 5.6 million open jobs for which employers cannot find qualified workers.

Ortiz envisions the government and the private sector working together to fund training. He is trying to convince the public and the media to get behind the Fight for 50 and urge their lawmakers to come on board.

“The problem is that when you look at the Fight for 15, all it’s doing is increasing the wage a dollar or two. If you don’t have a job, adding an extra dollar to zero is not going to help you,” he said.

While Ortiz focused on the impact on small businesses, Sen. Sherrod Brown, D-Ohio, had harsh words Friday for the larger corporations that pay executives big bucks without offering workers sufficient compensation.

“When corporations pay poverty-level wages, someone else has to pick up the tab. Spoiler alert: it’s you. It’s you as taxpayers,” he said in a speech at Ohio State University.

Brown used the event to lay out his plan to help American workers. Among other things, he proposed a “corporate freeloader fee” to penalize companies whose employees have to rely on government programs like food stamps and Medicaid to survive.

“If you choose to pay your workers so little and your profitability depends on paying those workers so little that they are disproportionately forced onto government assistance, then you need to reimburse American taxpayers,” he said.

The senator also released a report supporting his agenda, titled “Working Too Hard for Too Little.”

Working Too Hard for Too Little by Stephen Loiaconi on Scribd

“Adjusted for inflation, the federal minimum wage had the most purchasing power in 1968, when it was sufficient to keep a family of three out of poverty,” the report states.

Brown advocates raising the federal minimum wage to $15 per hour, and he believes the positive repercussions of enacting such a policy would outweigh any negative effects.

“Corporations always want to talk about the cost of raising wages and benefits,” he said Friday. “But what about the cost of not raising them? We’ve seen what years of stagnant wages and a fraying safety net have cost our country and its millions of workers. It’s time that we did something about it.”

Not all business owners agree that a higher minimum wage would be disastrous. Brown cited one Ohio pizzeria owner who wrote him a letter saying that if he can afford to pay his restaurant staff a living wage, so can businesses bigger than his.

With Republicans running the White House and Congress, there has been little movement on a minimum wage hike on the federal level, so local legislatures in Democrat-controlled cities are taking the lead.

The Baltimore City Council advanced a bill this week that would raise the city’s minimum wage to $15 per hour by 2022. It could get a vote by the full council next week. Councilmembers heard hours of testimony Wednesday from supporters and opponents of the measure.

One group supporting the Baltimore measure is Business for a Fair Minimum Wage, a network of business owners and executives who say higher wages lead to lower employee turnover, higher productivity and more customer satisfaction.

Holly Sklar, the organization’s CEO, said the experience of communities that have raised their minimum wages does not bear out predictions of job losses and shuttered storefronts.

“That argument is made about every increase at every level all the time,” she said.

Instead, she believes businesses will find that as wages rise incrementally, the benefits become clearer and the local economy gets stronger around them.

“You certainly don’t save in the long run by paying people low wages,” Sklar said.

Some economists remain unconvinced of the downside of raising the minimum wage as well.

According to David Cooper, senior economic analyst at the Economic Policy Institute, the minimum wage was enough to cover basic needs when it was introduced in the 1930s, and by the 1960s it was equal to about $10 per hour at modern values. It has not kept pace with the cost of living since then.

“We have let this problem fester for too long… The gap between where the minimum wage should be and where it is is quite large,” Cooper said.

He recognizes the concerns of business owners who do not believe they can afford increases, but the hikes are generally phased in over time to allow them to prepare.

“All of the research on minimum wage increases over the last 20 to 30 years has shown that businesses are able to adjust,” he said.

Some critics have argued local minimum wage increases place businesses at a disadvantage against competitors the next town over, and they warn that companies will just move to communities with lower wages. Cooper rejected those complaints.

“Most of the industries that are affected by increases in the minimum wage are direct-to-consumer industries… These are businesses where the primary factor in their location decisions tends to be access to customers,” he said. In many cases, rent is a bigger consideration than labor costs.

Cooper is skeptical that job training can replace better wages, and even then, the lowest-paying jobs should still be held to higher standards than they are.

“You’re not going to be able to train everyone to get a middle-class job unless you set standards to ensure that most jobs are middle-class jobs,” he said.

Ortiz is a firm believer that training is the key to climbing out of the low-wage trap, though.

“Raising minimum wages isn’t going to give somebody a skill,” he said. “It’s just going to perpetuate the challenge and the issue that they’re currently in already.”

Sklar advocates training too, but she emphasized that it is not a substitute for paying a living wage.

“It’s not a plausible either/or solution,” she said.

Not all low-paying jobs are low-skilled jobs, she added, and they are not all positions that can be filled by teenagers. Child care workers, home health aides, and education workers are in some cases among those making minimum wage or not much above it. According to Sklar, those people should be earning enough to stick with those jobs and become more experienced.

“It’s not just a matter of training,” she said. “It’s about what is being done to make sure that you have some kind of standards at the wage floor.”

It may be true that less than a half million workers over 25 are currently earning minimum wage, but Sklar noted they are not the only ones who would benefit if the minimum rose.

“It’s not about who’s earning $7.25 today,” she said. “It’s about who’s in between where it is and where it’s going.”

BLS Characteristics of Minimum Wage Workers 2015 by Stephen Loiaconi on Scribd

Economic Policy Institute research found in 2015 that 35 million workers would earn more if the federal minimum wage rose to $12 per hour, and two-thirds of them were 25 or older.

Still, Ortiz maintains that the battle over the minimum wage is simply the wrong fight when so many, particularly younger workers, are unemployed.

“I’m not saying I’m against helping people out. I’m very much for it…but getting the right skills is what’s critical here, getting the right education,” he said.

“Raising the minimum wage when you don’t have a job, how is that going to help them?”

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