Gov’t has unintended consequences

Published 3:46 pm Saturday, November 1, 2014

Guest column, by Peggy Bennett

Unintended consequences. Years ago, a friend of mine had his city water turned off because he couldn’t pay his bill. I wanted to help him, so I went to the city and anonymously paid the bill. I was excited for my friend to get home from work and find that he now had water. Unfortunately, what he found was an overflowing upstairs sink with water running down through the ceiling of his living room. I had no idea that a faucet had been left in the open position. I felt so bad. What I’d meant for good actually caused harm.

Peggy Bennett

Peggy Bennett

Government can often be the producers of unintended consequences as well. There are so many times when a law or regulation is passed and then down the line we find out that new and even more difficult problems were created, many times out of a law or policy that was intended to help.

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Minimum wage is a hot topic this election season. Should minimum wage have been raised? What about minimum-wage cost-of-living increases for inflation? My first and foremost thought when I consider this topic is, let’s think this through so we don’t have unintended consequences and hurt the very people we mean to help.

Throughout my years as a teacher, I have worked with many families who are struggling to make a living to support themselves. Last year, a family had one parent working a night job and the other parent working two day jobs just to make ends meet. They were hard-working people and doing what they had to do to support a family. My heart goes out to this family and those like them. I want to see everyone have the opportunity to make a livable wage and not have to be put into situations like that.

On the surface, raising the minimum wage seems like a great way to help struggling families like this. After all, everyone who works hard deserves a livable wage. That’s what my heart tells me. However, I also need to balance my heart with economic reality because, if I don’t, I will probably hurt the very people I want to help. Not only that, I may very well hurt other people that are not even directly connected to the issue. It’s important to me to always consider potential unintended consequences.

Let’s look at the economic reality of raising the minimum wage. There is ample research that shows raising the minimum wage leads to a decrease in employment of the very workers we are trying to help. Research shows that a 10 percent increase in the minimum wage leads to a 1 to 3 percent decrease in employment of low-skilled workers, and even a greater decrease in the long term. (Forbes Magazine, 5-7-13)

Even harder hit are minorities. David Neumark, an American economist and a professor of economics at the University of California, Irvine, finds that a 10 percent increase in the minimum wage will decrease minority employment by 3.9 percent, with the majority of the burden falling on minority teenagers (6.6 percent).

There are other unintended consequences of raising the minimum wage as well. One nursing home director I’ve spoken to told me that, even though nursing homes don’t pay minimum wage for their workers, they will have to bump up their wages to compete with minimum wage. This puts our already struggling nursing homes in a pickle because the state doesn’t allow them to simply raise their rate to make up the difference. What are they supposed to do, cut services or food for our seniors?

So, how can we help struggling low-wage earners without the unintended consequences of actually harming them, along with also harming other businesses and workers? I believe the answer is to bring more and better-paying jobs into our area so that people do not need to rely on minimum-wage jobs to provide for their families. We do that by creating a better economic climate so we can compete with bordering states, like Iowa, to bring in new employers.

In addition, we need to make sure we have a quality education system that is preparing and training people for the job market. We need to focus on employable skills. If we get workers who have employable skills, employers will compete for those workers and wages will naturally go up.

My heart and passion are for the people of our local communities. I desire to see the communities of 27A lifted up and see more opportunity for people. However, I differ from my opponent because I want to make sure that we don’t design our laws on what just “feels good,” but on what will really work for people. I will combine my passion for people with sound research to find solutions that will truly make a difference for our communities.

Peggy Bennett, a Republican from Albert Lea, is a first-grade teacher at Sibley Elementary School.