Fight for $15: is a minimum wage increase economic justice or an economic death sentence?

• Author: Webb, Gaylen
• Position: Business Trends

Now that legislators in California and New York have passed measures to raise their respective minimum wages to $15 per hour, the push to "Fight for $15" is sweeping the nation. Would a minimum wage hike in Utah be a step toward economic justice or a death sentence for small, struggling businesses?

"It would kill us," says Jessica Fowler, co-owner of the iconic Burger Bar restaurant in Roy. "It's something we worry about all the time."

Restaurants, which fit within the leisure and hospitality industry, employ the largest number of minimum wage workers in Utah, followed by retail trade, and education and health services. The Burger Bar actually pays wages that are much higher than the minimum wage--$17 per hour for some of its workers--but Fowler says it would be a catastrophe if the restaurant had to start every employee out at $15 per hour.

"We invest heavily in the employees that stay with us and don't want them to be trapped at $7.25 per hour. Still, it is unrealistic for us to pay unskilled, entry-level employees the same wage that we pay our trained employees that have been with us a long time," she says.

Market forces

Carrie Mayne, chief economist for the Utah Department of Workforce Services, believes a California- or New York-type minimum wage hike in Utah is unnecessary because wages here are largely driven by economic conditions. And with the state's economy currently humming in high gear, low unemployment and competition for labor are naturally driving up wages, even for entry-level positions.

In the heyday before the Great Recession, many fast food employers in the state were offering $10 per hour--not by mandate but because of competition for workers. Theoretically, Mayne explains, a minimal minimum wage bump would not have affected those employers--they were already paying more than the national standard.

She suggests the minimum wage actions by California and New York align more closely with the idea of raising wages for low-income workers to compensate for the high cost of living in those states. In other words, it's a push toward "economic justice," as one California legislator called it. But a dollar goes much further in Utah than it does in cities on the East or West Coasts. With Utah's lower cost of living, the minimum wage need not be on par with other, higher cost of living states, Mayne says.

Natalie Gochnour, associate dean of the University of Utah's business school and chief economist for the Salt Lake Chamber, has...