Most economic reporting is so one-sided that it's actually shocking to see a newspaper story acknowledging that there are tradeoffs in government mandates:
A huge smile spread across Katrice Thurman's face as she described all she'd be able to afford once minimum wage in Indiana increased.
"I would buy school supplies for my kids, school clothing and hopefully a car," said Thurman of Gary, who works as a sales associate at Toys 'R' Us in Hobart and supports her two young children. "It will help a lot."
On the flip side, Carl Champion, owner of Champ's Liquors in Gary, listed the items he would have to cut in his small shop in order to function while giving his employees more money.
"We'll have to reduce man hours and stay within the framework of something we can absorb, or we'll have to raise the prices," Champion said. "We'll have to work it from that angle."
[. . .]
"Raising the minimum wage provides more economic security to our state's working poor," state Sen. Frank Mrvan Jr., D-Hammond, said. "In Lake County alone, nearly 15 percent of people live in poverty. These are the people who need the increase most."
An Economic Policy Institute report in 1998 showed that minimum wage increases in 1996 and 1997 led to increased worker productivity, reduced training and recruiting costs and improved employee attendance and morale.
But those positive results will only be able to come to fruition if the businesses survive the wage hikes, said Joe Gomeztagle, executive director of the Midwest Business & Economic Research Group LLC, based in Crown Point. He said many of the small businesses simply won't make it.
Companies don't just absorb new costs and accept lower profits. They make up the difference somewhere else -- there will be some losers to offset those government-created winners. There will be low-income workers let go or not hired in the first place. The cost of goods and services will go up, and hours at some places will be cut back. And some small businesses will, indeed, be forced to close. If you want to argue that the overall effect on the economy will be positive, that there will be more winners than losers, fine. But you don't get to pretend there won't be losers.
