Jeff Sayer, director of Idaho’s Department of Commerce, says the notion that a minimum wage in Idaho should be a livable wage “scares me to death.”
He agrees that Idaho’s economy cannot grow with low wages, but says that raising the minimum wage would create more problems than it would solve. The problem in Idaho is finding workers with the skill level to meet the employment demand.
“If we want to raise the wages, we need to raise the skill levels,” Sayer said. “I’ve talked with many business leaders and just about everyone says the No. 1 problem is finding the talent. We have tons of jobs out there, but employers can’t find people to fill them. Instead of imposing a cost on businesses, we need to help provide them with what they need. If we can do that, then everybody wins.”
Yet, the public sentiment is strong for raising the minimum wage. According to a recent poll from Dan Jones & Associates, 7 percent of Idahoans think the hourly wage should be raised from $7.25 an hour to $10 – a 38 percent increase. The idea of an increase has plenty support from Democrats who say, correctly, that individuals and families cannot live on $7.25; a $15 minimum wage, as they have in Seattle, would be more reasonable. But Sayer parts ways with leading Democrats, such as House Minority Leader John Rusche of Lewiston, on that issue.
“Those who advocate for raising the minimum wage seem to think there is this golden pot of money sitting out there that businesses are not tapping into – and that there would be no impact on them if they had to pay the increased salaries,” Sayer said.
“If we go down this path, we need to be careful about who is affected and whether businesses can reasonably afford it,” he said. “My answer is, no they can’t.”
Sayer sees a government mandate for increasing wages leading to a decrease in available jobs, especially in rural communities. He fears that some industry CEOs will automate their facilities before increasing the minimum wage.
“Employers are watching this issue very carefully,” Sayer said.
He’s not using scare tactics here. Having worked with a company where rounds of layoffs were common, I know from experience that CEOs will take drastic steps to improve the bottom line. Automation would be costly, for sure. But from a business perspective, robots don’t require a salary and benefits package. Human resource and payroll departments could be virtually eliminated.
But according to Sayer, not all companies are looking to save nickels and dimes. He and others, such as Ken Edmunds, who heads the Department of Labor, and Dwight Johnson, the director of professional and technical education, say there are many high-paying jobs available – some paying in six figures. Unfortunately, employers have to recruit from out of state to fill those positions.
Certainly, more money needs to go to education; Idaho cannot afford to be at, or near, the bottom in almost all funding categories. More importantly, Sayer says, there needs to be education strategies to build the employment pipeline. Steve Wilson, president of the Coeur d’Alene Chamber of Commerce, says community colleges such as North Idaho College could provide those strategies – with some help.
“Look at the Legislature. The last thing to be funded appropriately is the community colleges,” he said.
NIC has begun a program to develop products for a growing aerospace industry in the area, with the help of a federal grant. “That’s one example, and it can grow with additional funding.”
Johnson says he’s aware of about 2,200 job openings that pay starting wages between $32,000 and $70,000 a year. “We’re producing 542 graduates, and we have 850 students waiting to get into those programs that we are not able to accommodate. Give me a 10 percent increase, and I can graduate 400 more people in those programs and reduce the wait line by 48 percent.”
Edmunds agrees with Sayer that raising the minimum wage is not the answer.
“Employers are saying we can’t get the people we need … those with the right skill set,” Edmunds said. “I have no idea how we are going to meet the demand of the work force that employers say are lacking.”
Edmunds expects that the federal minimum wage will increase at some point, and Idaho will comply. But he makes a strong argument that Idaho would not gain by getting ahead of Congress and raising the wage standard on its own.